SARS update

Print Article E-Mail Article

Dragonair's passenger numbers have dropped to just 700 from the usual 10,000-13,000 daily as the SARS crisis in Greater China worsens

The Hong Kong carrier's shareholders, which include Cathay Pacific, are set to bail out the airline if its daily losses of $1m continue. Dragonair has already grounded nine of its 21 aircraft.

Though new SARS cases in Beijing dropped to 70 on Monday-the third day that new cases have numbered less than 100-doubts remain about the accuracy of mainland figures. Total cases in the capital now officially exceed 1,960, with four deaths on Tuesday.

According to an Airport Authority Hong Kong spokesman, flights at Hong Kong were down to 221 on Tuesday compared to 483 for the same day in May last year, representing a drop in passengers of 55%. A senior Dragonair source said forward bookings looked grim and there was little hope for better in May and June.

To the intense relief of the Hong Kong travel and duty-free retail industries, the World Health Organization (WHO) has issued criteria for lifting the travel advisory ban on visiting the territory, devastated by the SARS outbreak. The number of new cases must be below five for at least three consecutive days. The figure yesterday stood at nine. The number of people receiving treatment for SARS in Hong Kong hospitals must also drop below 60.

WHO also insists that passengers originating from Hong Kong must stop spreading the disease to other countries-which has not happened for nearly three weeks now-and the mode of transmission must be understood in each case. But as Hong Kong breathed a sigh of relief, WHO warned the territory could remain blacklisted if the outbreak in China is not contained. "China is the real danger," said WHO spokesman Peter Cordingley.

Hong Kong estimates SARS will cost the territory's economy HK$40bn ($5.1bn) this year. Hotels, retailers and the travel industry account for 9% of Hong Kong's GDP. If the SARS situation continues for another month, their estimated annual turnover of HK$120bn will drop by a third this year.

The situation remains bleak for Hong Kong's retailers as passenger numbers fall by up to 60%. "Now, SARS is affecting our numbers in direct proportion," said Nuance-Watson (HK) managing director Alessandra Piovesana. "The challenge is to keep the infrastructure on solid ground. That includes staff, stock levels and so on. Incidents such as this can impair the financial outcome for the whole fiscal year. It is indeed a tragic incident for our industry."

The situation would improve as soon as passengers progressively start travelling again, she added. "However, operational optimal condition will need another 6 months to fall in place."

Elsewhere, the WHO lifted the travel advisory on Vietnam after the country reported no new cases since April 10.