By Matt O'Sullivan
AIRLINES around the world, including Qantas and Virgin Blue, are bracing for what could become the most significant shock to the industry since the outbreak of the SARS virus in 2003.
The rise in swine flu cases in Mexico, Canada and the United States could not come at a worse time for airlines, which have been sacking staff and cutting flights to counter the worst downturn in travel the industry has experienced.
The Federal Government has demanded airlines report to quarantine officers any passengers with flu-like symptoms on flights from the Americas. Authorities throughout Asia, including those in New Zealand, Singapore and Japan, have also begun screening passengers. Qantas has not made any specific changes to its services but said it would be working closely with authorities and was ready to beef up measures if needed.
Jetstar's chief executive, Bruce Buchanan, said it was still too early to gauge the impact of the swine flu outbreak but Jetstar was "monitoring it extremely closely".
"It's hard to say how it will end up and what the impact will be," he told the Herald. "[But] if it does blow up it will be a real problem for those carriers in North America."
One of the worst-affected routes to Australia could be the trans-Pacific from the US, on which Qantas is engaged in a price war with United Airlines and Virgin's long-haul carrier, V Australia. The route was Qantas's most profitable only months ago but is now loss-making. Shares in Qantas and Virgin Blue followed airline stocks downwards throughout the Asia-Pacific yesterday on fears the virus will deter travellers. Qantas slumped 4 per cent and Virgin Blue fell to a three-week low.
The swine flu outbreak also threatens to be a big blow to tourism, which is struggling from a large fall in overseas visitors in recent months.
The executive director of the Tourism and Transport Forum, Olivia Wirth, warned that any additional factor that stopped people travelling would have a "serious impact" on the sector.
The peak industry body also released a report yesterday by the founder of Access Economics, Geoff Carmody, that warned the industry will be disproportionately affected by higher levels of joblessness. It calculates that 29,000 jobs in the industry will disappear if unemployment reaches 10 per cent.
The executive chairman of the Centre for Asia Pacific Aviation, Peter Harbison, said it would take at least two weeks before the impact of swine flu on airline and tourism was known.
"I don't think times have ever been worse for airlines and once something like this does get out in the public domain … undoubtedly it's immediately causing people to rethink their travel plans," he said. "It's certainly not what the airlines need … [but] at this stage there is nothing to suggest it's going to be of the same scale as SARS by any means."
Airports will also be affected if the swine-flu outbreak worsens. Sydney Airport suffered a 3.4 per cent fall in overall passenger traffic in the month after the SARS outbreak in April 2003.
"We have had the experience of SARS, and we saw that it's not necessarily just people falling sick, because fear takes over too," said a Deutsche Bank analyst, Cameron McDonald.
Airlines such as Cathay Pacific suffered major falls in passenger numbers during the SARS crisis but were aided by steady cargo volumes. This time, declines in freight traffic have been more severe than falls in passengers.
Sign up for the Traveller newsletter
The latest travel news, tips and inspiration delivered to your inbox. Sign up now.