NEW YORK (Reuters) - American Airlines' AAL.O president on Friday said it is too early to tell if the rapidly spreading Zika virus will impact travel, but so far the airline has seen no material change to flight bookings.
American Airlines Group Inc, the world’s largest airline, and other U.S. carriers are facing mounting concern about the mosquito-borne virus as investors mull a slump in demand to the Caribbean and other tourist hotspots.
“Zika is not airborne, so there is not a danger of it being transmitted between passengers,” American’s President Scott Kirby said on a call with investors Friday. “As a result, you wouldn’t expect it to have as big an impact as something like SARS.”
Zika, linked to birth defects in thousands of babies in Brazil, could nonetheless become a challenge for American. Kirby said flight sales to Brazil on the airline, which has the widest Latin American network among U.S. peers, had fallen to about 2.0 percent of its revenue from 6.1 percent in roughly the past two years.
While airlines have yet to report a bookings drop because of Zika, a warning from the World Health Organization that four million people in the Americas could get the virus has exacerbated jitters for the travel industry, hurt by outbreaks of SARS and Ebola in years past.
“People incrementally are starting to pay a little more attention to Zika than they were before,” said Sterne Agee CRT analyst Adam Hackel. “(They) freak out when it comes to airlines.”
New York-traded airline stocks .XAL dropped 3.1 percent Thursday, which analysts attributed to Zika fears and an uptick in oil prices, before rebounding 1.4 percent in Friday afternoon trade.
American saw the sector’s biggest stock decline Friday with shares falling more than 1.0 percent. It forecast a passenger unit revenue decline in the first quarter between 6.0 percent and 8.0 percent, not accounting for any potential Zika impact.
On Thursday, shares of another top U.S. airline in the Caribbean, JetBlue Airways Corp JBLU.O, tumbled more than 6.0 percent even though it reported no measurable impact from the virus.
“Short-term especially, these stocks will react,” Hackel said, recalling the sharp, if short-lived selloff in October 2014, when highly contagious Ebola was reported in the United States.
American is offering pregnant customers, who appear most vulnerable to the virus, and their companions refunds for tickets to Zika-impacted regions. United UAL.N, Delta DAL.N and JetBlue have also announced refunds.
Reporting By Jeffrey Dastin in New York; Editing by Christian Plumb
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