Paris attacks weigh on travel industry

Paris attacks weigh on travel industry
By Anne Majumdar


Airline and travel-related stocks have tumbled in Asia following the deadly terror attacks in Paris, but analysts and industry players said they expect the impact to be short-lived.

Travellers from the region cancelled trips as France grappled with the aftermath of the carnage that left at least 129 people dead and more than 350 wounded.

The horrific events come just a little over two weeks after a Russian passenger plane came down in Egypt’s Sinai peninsula, killing all 224 people on board, which Islamic State militants have claimed responsibility for.

“Whenever there’s terrorism, businesses are affected. Worst hit are commerce and tourism, and as a consequence, airlines,” said Shukor Yusof, an analyst with aviation research firm Endau Analytics.

Most stock markets fell across Asia, with airlines and travel-related firms among the most hurt.

In Shanghai, Air China, China Eastern Airlines and China Southern Airlines each lost more than two per cent, while tourism firms also retreated – China CYTS Tours Holding lost 1.28 per cent and China International Travel Service fell 1.05 per cent.

Hong Kong flag carrier Cathay Pacific was down 2.7 per cent.

“The airlines and tourism companies are affected by the Paris attack,” Haitong Securities analyst Zhang Qi told AFP.

“But it’s more of a psychological impact on the stock market,” he said.

But Hong Kong-based financial analyst Kevin Tam said “the actual impact won’t be that much because of the geographical concentration.

There will be more material impact on European and American travel-related companies”.

Singapore Airlines was down 0.92 per cent in late afternoon trade in the city-state and South Korean flag carrier Korean Air closed 3.33 lower while rival Asiana Airlines finished down 3.32 per cent in Seoul.

Top South Korean tour operator Hana Tour closed 8.94 per cent lower following a barrage of trip cancellations after the South Korean government advised nationals to “refrain from” travelling to Paris and its surrounding areas.

Sydney-listed flag carrier Qantas was down 1.7 per cent and Virgin Australia tumbled 6.5 per cent as Air New Zealand was 2.8 per cent lower in Wellington.

Japan Airlines closed down 2.95 per cent and rival All Nippon Airways declined 3.46 per cent. HIS, a major travel agency, finished 5.02 per cent due to trip cancellations.

“France is a main route. Japanese airlines get the most profit from international routes,” said Hajime Tozaki, a commerce professor at Waseda University.

Indonesia’s Garuda was down 1.32 per cent in afternoon trade but Fazal Bahardeen, chief executive of Singapore-based Muslim travel specialist Crescentrating, said the attacks are unlikely to deter tourism.

“More and more travellers are becoming determined not to let the terrorist fear mongering dictate their travel plans,” he told AFP.

Andrew Herdman, director general of the Association of Asia Pacific Airlines, urged travellers to react prudently to terror attacks.

“Past experience tells us that we must be careful not to let our emotions overwhelm good judgment, and care is needed to ensure that we do not over-react in ways which may only amplify the damage inflicted upon society,” he told AFP.

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