SARS continues to beset Asia-Pacific travel

By Andrew Compart and Jerry Limone

his is how badly SARS is affecting some Asian airlines: Cathay Pacific felt compelled to issue a press release stating it "has no plans to stop operations at any future date."

The release followed a Reuters report that the airline might consider suspending service in May if demand drops too low.

The report and the airline's response is an indication of what the Association of Asia Pacific Airlines called the worst situation ever faced by the carriers of the Asia-Pacific region.

The association's 17 airlines have cut about 650 flights per week this month.

In a prepared statement, the association's director general, Richard Stirland, said he expects airlines to cancel more flights "if the situation does not get better."

Cathay Pacific, based in Hong Kong, has been the hardest hit by the travel fallout from SARS and has canceled 42% of its schedule. It also has stopped promotional and advertising activities.

Also reeling is Singapore Airlines, which saw its March load factor fall 15.7 points, to 65.9%. The airline has reduced capacity by 19.7% for April and May, or by 199 weekly flights.

The latest changes included the April 13 suspension of its daily Singapore-Hong Kong-San Francisco service.

The airline's Singapore-Seoul (South Korea)-San Francisco service, however, was slated to increase from five to seven per week starting April 20.

Singapore, like many of the Asian carriers, is publicizing the actions it has taken to prevent the transmission of SARS on its flights.

That includes screening passengers and denying boarding to anyone with SARS-like symptoms as well as giving crew members extended breaks from flying if they have been exposed to someone suspected of having SARS.

Meanwhile, the Hong Kong government is requiring passengers departing from Hong Kong Airport to have their temperatures taken before checking in.

Passengers with fevers or SARS-like symptoms will not be allowed to board airplanes.

SARS has been hitting travel agencies extremely hard, too, especially firms like Kintetsu International Express in New York, a $290 million agency that depends on corporate and leisure travel to Asia for about 40% of its volume.

Kintetsu's manager of sales and marketing, Aash Shravah, said business is down about 30% from last year. He attributes the decline equally to SARS and the war with Iraq.

No corporate clients have banned travel to Asia, said Shravah, but he said "travelers just tend not to go." Most of Kintetsu's clients are small and midsize companies, which generally don't make drastic policy changes in times of crisis the way some large corporations do, he added.

Meanwhile, the Business Travel Coalition's (BTC) latest survey, from April 16, shows that 61% of U.S. firms have banned travel to some Asian countries, up from 27% on April 1 (see chart). The survey also showed that 43% of companies have increased use of Web conferencing since the SARS outbreak.

The survey covered 137 corporations that average about 30 roundtrips to Asia per month.

A majority of respondents (65%) said they didn't believe the media was overhyping the SARS epidemic, the BTC said.

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