Companies Fear Repeat Of 'SARS Effect' With Flu

When the SARS outbreak hit Asia in spring 2003, it caught not only health officials by surprise, but also the travel industry and retailers. By the time the worst of the event ended a few weeks later, it had caused fewer than 800 deaths but had cost global businesses more than $30 billion.

Despite the relatively limited impact of Severe Acute Respiratory Syndrome, the disease managed to shave as much as 1 percent from growth in affected countries in 2003, according to the World Health Organization. If swine flu turns out to be as bad as or worse than the SARS outbreak, it could further damage the already beaten down world economy, economists say.

Jittery Investors

That possibility is clearly on the minds of investors. This week, the stocks of hotels, airlines and cruise lines have been falling on exchanges worldwide.

The jitters stem from the uncertainty and behavior changes that disease prompts in consumers, said David Asch, who has written about SARS and specializes in health economics at the University of Pennsylvania's Wharton School.

"It does seem that this could happen to me; it could happen to my kids or my aging parents — that really gets people's attention," he said.

Avoiding contact with others is the first line of defense against infectious disease, and fear of swine flu could cause people to avoid mass transit or anything else that forces them into close contact with strangers, Asch said.

"Cutting back on airline travel is one obvious thing. It could also mean keeping the kids out of day care and at home. If the kids are at home, so are the parents," he said.

The Costs

Asian airlines and U.S. carriers that flew to Asia in 2003 were hit hard by SARS. During the first five months of the year, airlines in the Asia-Pacific region saw 50 percent of their traffic vanish before ending the year about 8 percent down, according to the International Air Transport Association. North American carriers lost 3.7 percent of their total international traffic due to SARS.

Although airlines already are suffering because of the global recession and other pressures, they are at least better equipped this time to deal with a public health problem.

SARS "showed the industry and the airlines themselves that they need to have a crisis plan," said Steven Lott, an IATA spokesman. "During SARS, a lot of airlines didn't have that sort of thing in place."

"Communication is the key for the airlines — internally, with the public and among government and public health officials," Lott said. "The last thing we want is for bad information to be getting to the public."

The plan advises airlines to take concrete steps to address an epidemic, including forming an emergency response team to coordinate everything from public relations to the proper disinfectant for cabin-cleaning staff to use.

American Airlines issued an e-mail to media Monday saying it is "closely monitoring the situation" but had not canceled any flights as a result of swine flu.

Addressing Concerns

Maggie Condon-Campos, a travel agent with Los Angeles-based TravelStore Inc., said she has seen no cancellations yet in her outbound bookings to Mexico despite U.S. government advisories against "unnecessary travel" there.

"Last week it didn't really come up," she said. "That may be different this week because it's so much in the news now."

Condon-Campos said she will advise clients in high-risk groups — tours that include senior citizens or small children, for example — to be especially cautious right now.

But that might not be enough to assuage travelers' concerns as more details of the swine flu outbreak emerge.

"If you wanted to tell a story that would be a good plot for a thriller about an epidemic, it would probably involve animals, a foreign country and a mysterious virus strain," Asch said.

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