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Ebola fears hit value of travel firms, cruise and airlines

October 9, 2014 Destination Global, Headline News No Comments Email Email

egtmedia59A global disease pandemic could cost the travel and tourism industry one trillion dollars, one of the world’s leading financial management and advisory companies, Merrill Lynch, has estimated.

The estimate of USD 1 trillion (a trillion is a thousand billion) came yesterday as news of the first reported Ebola infection to occur outside West Africa sharply depressed travel-related stocks in Europe. The new Ebola case is in Spain and the victim is a hospital nurse who says she followed all safety protocols but still became ill. The nosedive in share prices mirrored the effect on airline stocks in the US last week after the potentially fatal disease arrived there in the form of a passenger from Liberia who flew to Dallas-Fort Worth.

In the Spanish case, four people, including the nurse who tested positive for Ebola, have been hospitalised and are being monitored for any sign of contagion. Ebola kills about 50% of all those who catch it.

News of the Spanish case sent shares in IAG (the company that owns British Airways and Spain’s Iberia) plunging by 6.9%, while InterContinental lost 3.7% and Carnival fell 6.7%, Britain’s Financial Times reported. Ryanair lost 5.1% after JPMorgan Cazenove cut its rating on the stock to “neutral” on valuation grounds.

Easyjet –  and even Fastjet, which reported record passenger numbers for September – registered share-price falls. Giant travel and tour operator TUI Travel saw its stock fall by 3.4% and Thomas Cook registered a 4.5% fall.

Investors are acutely aware that fear of contagion could have a massive effect on business. Travel and holidays are the stuff of daydreams – nothing dampens them faster than concerns about a dreaded disease.

Investors seeking precedents have turned to the SARS pandemic of 2003, according to the Financial Times.

The 2003 SARS outbreak saw arrivals at Hong Kong airport plunge by nearly 70% and InterContinental Hotels revpar (revenue per average room) dive by about 25% for the quarter. Tourism fell 90% in April and May 2003, the European Commission has estimated.

Ebola is raging in the West African nations of Sierra Leone, Guinea and Liberia, where it has killed 3400 people. It has also spread to Nigeria, Senegal, the US and now Spain. One of the main problems with the disease is lack of certainty. One expert said yesterday that the phrase “as far as we know” should be added to virtually every statement made about it.

Some of the original pronouncements about Ebola have turned out to be wrong. It was initially suggested the disease was unlikely to spread far, simply because sufferers lived in remote regions and were too poor to afford air travel. Then an infected passenger flew from Liberia to Lagos, Nigeria, Africa’s most populous city, and infected others there before dying.

Nigeria seems to be one of Ebola’s better news stories. The country took immediate action and took the disease very seriously. Of 19 confirmed cases there, 12 recovered. That’s better than average. At present, there are no known cases of the virus in Nigeria.

More recently, the first person to be diagnosed with Ebola in the US, Thomas Eric Duncan, flew to Dallas from Liberia, using Brussels Airlines to Belgium, then United Airlines to Washington DC and United again to Dallas, with lengthy layovers at intermediate points. Duncan, a Liberian, got on the plane simply by answering “no” when filling out a form about Ebola at his airport of departure, when he should truthfully have answered “yes”. He was hospitalised in Dallas in critical condition and US health authorities have been scrambling to trace 80 people who may have been in contact with him.

Duncan died in hospital last night. A Texas police deputy who visited Duncan’s apartment was been rushed to hospital with fever symptoms but did not have Ebola. Similarly, an Australian nurse who had worked in an Ebola clinic in Sierra Leone recently and is now in Cairns has been found not to have the disease.

Even so, the ease with which people can fly around the world from Ebola-afflicted regions has spooked airline and tour company investors.

In the Spanish case, the infected nurse, Teresa Romero, had been treating two Spanish missionaries who caught the disease in West Africa and then flew back to Spain from Sierra Leone. At least one of the missionaries has since died.

The World Health Organisation (WHO) says the spread of the virus outside Africa is now “unavoidable” but adds that the chances of a full-blown outbreak are slim.

WHO says air services to West Africa should be maintained so medical experts essential for treating the disease can fly in and out. Some critics suggest commercial air services should be curtailed and military transports used instead, so only essential personnel can travel.

Disturbingly, some public health specialists say there is no proof that an infected person who lacks symptoms cannot spread the virus to others.

“It’s really unclear,” Michael Osterholm, a public health scientist at the University of Minnesota, told the Los Angeles Times yesterday when questioned on the subject. “None of us know.”

Osterholm recently served on the US government’s National Science Advisory Board for Biosecurity.

In the meantime, airports are reportedly boosting their screening for the disease, which is contagious when sufferers are showing symptoms, at which time it becomes highly infectious and can be caught by touching the body or bodily fluids of the victim, or surfaces they have touched.

Ebola has an incubation period of up to 21 days. Thus an airline passenger who is healthy when they fly can go down with the disease weeks after arrival. No cure or vaccine is currently available although some experimental drugs, such a ZMapp, are showing promise. The current outbreak of Ebola is the largest ever recorded.

Although much mystery surrounds Ebola, the African bushmeat trade (the catching and eating of wild animals, including primates such as gorillas and chimpanzees), is thought to play a role in outbreaks. Fruit bats are likely to be involved as well. An explainer compiled by ABC News can be examined by clicking here.

Written by : Peter Needham

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