Swine Flu May Present Third Major Hurdle for Airlines

(MoneyWatch)  First it was high fuel prices. Then it was the sagging economy. Now we have swine flu. While the impact on air travel has yet to be felt, this could get very ugly very quickly if things escalate. Anyone remember SARS?

If you're living in the US, SARS may not have impacted you that much because we never saw an outbreak. But for those in Asia and in Toronto, this was absolutely devastating to the airline industry as people simply stopped traveling due to fear of infection. Cathay Pacific saw the worst of it as Hong Kong suffered. The airline grounded a fifth of its planes, canceled half its flights, and saw traffic drop by up to 75 percent. Yeah, it was that bad.

But while Toronto saw its own SARS problems, it never really crossed the border. With swine flu, though the worst of it has been confined to Mexico, there have already been cases here in the US. That alone will be enough to scare some people, and the airlines are already feeling the pinch.

Most airlines are allowing fee-free changes on flights to Mexico. I'd watch out for Alaska, American, and Continental to see some real pain from this since they have so many flights across the border. But it's unclear how much traffic will drop off. The media is certainly doing what it can to scare people, and the first death that occurs in the US will probably create even more panic.

It's too early to say what will happen with this right now, but there's no question there will be an impact. This is not what the airlines need right now.