Flu concerns rock airline stocks

Airline stocks throughout Asia have been hit by concern a growing number of swine-flu cases in the United States and Mexico may restrict travel.

In early trading in Hong Kong, Air China, the world's largest carrier by market value, sank 11 per cent.

Singapore Air, Asia's most profitable carrier, fell 4.7 per cent while Qantas dropped 4 per cent.

Air New Zealand closed down 3c - or 2.7 per cent - to $1.08 with one analyst saying it was too early to predict the outbreak's effect on the airline.

Singapore has tightened checks at its main airport to screen arriving passengers against the flu outbreak, while authorities in Japan will examine flights from Mexico, where the flu was first detected. Japan Airlines, Asia's largest carrier by sales, fell 2.5 per cent, while Korean Air Lines tumbled 5.2 per cent to 38,700 won.

"Swine flu poses a risk to global airlines as discretionary travel gets cut back even more," said Ben Potter, a Melbourne-based analyst at IG Markets. "Customers look to avoid possible contact with infected persons and there's the possibility Governments may urge a cutback in flights to help control the spread."

Prasad Patkar, of Platypus Asset Management in Sydney, said virus outbreaks hit travel "quickly and savagely ... the market clearly believes [it] will have economic consequences."

- BLOOMBERG, STAFF REPORTER