Already pummeled by recession, airlines now must deal with concerns about flu
Airplanes themselves are safe, experts say, but flights to Mexico have been cut. Drug cartel violence is an issue too.
(Page 2 of 2)
But just as the president and others are trying to calm fears with information, so too are some airline analysts hoping to put the impact of the potential pandemic into an economic context for the airlines. Many note it may not be as dire as it may first appear.Skip to next paragraph
Subscribe Today to the Monitor
"It will hurt them some in the short term, but I'm not sure about the long-run or how much damage it will do," says Richard Gritta, a transportation economist at the University of Portland in Oregon. "We have to see how this plays out."
Collectively, flights to Mexico make up only about one percent of the airlines' business, according to the ATA's Mr. Castelveter. "So it's not the lion's share of their business, it won't have the same sort of effect you saw with the outbreak of [SARS] when the entire Pacific rim was affected," he says.
For almost two months in 2003, many Asian airlines flew planes that were nearly empty, and domestic carriers that provided service to East Asia, like Northwest, also lost millions of dollars on those routes.
But the situation with Mexico today is different.
Travel to south of the border was already declining this year because of drug-related violence there. And several airlines, which learned the importance of cutting capacity quickly during the 2003 SARS outbreak, were quick to announce reductions this week.
Continental Airlines, which has the most weekly flights at an estimated 450 flights to 29 cities in Mexico, announced it was cutting service by more than 40 percent. United Airlines and US Airways are also reducing their Mexican flights.
"Mexico traffic was already in decline, you had the fear of going down to Cancun and getting shot by a drug cartel, so this is just more of an incremental decline," says Michael Boyd, president of The Boyd Group, an aviation consulting business in Evergreen, Colorado. "So it's really Mexico that's been hurt more than the airlines at this point."