Tag Archives: swine flu

Airline Industry Not Happy With Biden; WHO Debunks Usefulness of Travel Restrictions


Thursday morning Vice-President Joe Biden said on NBC’s Today Show, “I wouldn’t go anywhere in confined places now. It’s not that it’s going to Mexico, it’s [that] you’re in a confined aircraft; when one person sneezes it goes all the way through the aircraft. . .If you’re out in the middle of a field and someone sneezes that’s one thing. If you’re in a closed aircraft. . .it’s a different thing.”

Thank you Joe.

Unfortunately, we all know he’s right. Then again, the same could be said for riding in an elevator.

However, knowing that being in a small confined space with recirculated air for hours is probably not the best place in the world to be if someone in that space has something contagious is not what the airline industry needs to have said by a top government official on television. Not right now.

The Air Transport Association immediately blasted the comments, with CEO Jim May expressing “extreme disappointment at your suggestion that people should avoid air travel.”

The rest of the day, and even this morning, the fallout continued, with other government officials stepping up in an attempt to mitigate the damage, as did Transportation Secretary Ray LaHood late yesterday. LaHood said in a speech that “flying is safe and flying is healthy, and flying to Mexico is safe.”

Meanwhile, this morning the World Health Organization said that it was not recommending travel restrictions related to the outbreak of the virus. “Limiting travel and imposing travel restrictions would have very little effect on stopping the virus from spreading, but would be highly disruptive to the global community,” WHO said in a statement.

One of the reasons behind this statement? The lessons learned from the hysteria surrounding the SARS encounter. As WHO said in its statement, “Furthermore, although identifying the signs and symptoms of influenza in travellers can be an effective monitoring technique, it is not effective in reducing the spread of influenza as the virus can be transmitted from person to person before the onset of symptoms. Scientific research based on mathematical modelling indicates that restricting travel will be of limited or no benefit in stopping the spread of disease. Historical records of previous influenza pandemics, as well as experience with SARS, have validated this point.”

Continental Airlines Pulls the Cord on Mexico Capacity

Continental Airlines logo 020708.jpg.jpeg

This morning Continental Airlines announced that it was cutting capacity on its flights to Mexico by 50%.

As we noted here last week, 5.3% of Continental’s total passenger revenue is derived from Mexico flights. The airline has more flights scheduled to Mexico than any other airline, with an average of 450 flights per week.

The new schedule begins Monday.

The airline said that service to all of its 29 Mexican destinations will continue. However, the frequency of flights has been cut, and on some routes regional aircraft will replace larger aircraft.

Which Airlines Are Potentially Exposed the Most to Mexico Risk?


Gary Chase, airline analyst with Barclays, issued a note this morning in which he listed the exposure of different airlines to the potential short-term risk of passengers curtailing travel to Mexico.

Gary also took a look at the effect that the SARS scare had on the Asian carriers in 2003, and then extrapolated a kind of “worst case” scenario for our carriers — in terms of their Mexican exposure.

Of course, all of this is just conjecture at this point. This analysis is only looking at one part of the puzzle — the US carriers current exposure to Mexican flying. This assumes, which Gary pointed out, that the flu is able to be contained in Mexico.

And right now, that looks like a big assumption.

But let’s say that is the case. If that is the case, Alaska Airlines, Continental Airlines, US Airways and American Airlines are the four airlines that have the biggest percentage of their passenger revenue tied up on Mexican routes. Note that even though Alaska’s total O&D revenue tied to Mexico puts it fifth on the list, those flights make up 8% of the airline’s passenger revenues. A huge amount.



Airline Sector Hit Hard By Flu Concerns

Just in case you were so wrapped up with the NBA playoffs or the NFL draft that you didn’t watch much news over the weekend, or you didn’t read Jonathan’s note here that was posted last night — the reason your favorite airline stock is posting a loss this morning is directly attributable to one thing. Swine flu.

Or rather, fears that the flu, which has, up to now, been concentrated in areas of Mexico, but has already crossed the border to the U.S., has gone beyond the stage where cases that have been confirmed can be ‘contained.’

As a result, memories of the SARS epidemic of a few years ago, and what it did to the industry, (the Asian carriers were particularly hard hit) has investors selling off shares of airline stocks faster than you can buy a box of Kleenex.

The major airlines are taking the brunt of the selloff this morning, with shares of Continental, Delta, US Airways, United, Southwest, and American all down by double digits. Or very close to double digits.

Southwest Airlines Picks the Wrong Day to Trumpet Their LinkUp With Volaris

Talk about bad timing.

The Associated Press headline reads, “Southwest Airlines to add link to Mexico’s Volaris.”

This morning Southwest Airlines issued a press release in which it announced that it was putting a link on its website which will allow customers to buy tickets on Mexican airline Volaris. The two had already announced plans for a marketing/codeshare agreement last year.

Just what I want to do today. Fly to Mexico.

Just what an airline wants today — have their name in the headlines along with the word, “Mexico.”