Airline stocks hit as tourists flee Bali

Airline stocks hit as tourists flee Bali

Michael Perry, Reuters, Sydney

Asian airline stocks were sold off and Bali's image as a holiday paradise took a battering on Monday with thousands of tourists fleeing, as the horror of blasts that killed at least 183 people on the island hit regional tourism.

"Bali was perceived as a paradise but unfortunately, that kind of illusion has been destroyed," said Alicia Seah, a manager at SA (UIC) Tours, one of Singapore's largest outbound agencies.

Thousands of frightened tourists fled the "island of the Gods" on Monday along with bandaged and blooded victims from the bombs that ripped through nightclubs near Kuta Beach late on Saturday.

The United States and Australia have branded the blasts in Indonesia, the world's most populous Muslim country, an "act of terror".

The blasts have heightened fear that al Qaeda, the Islamic militant group blamed for the Sept. 11 attacks in the United States, has regrouped.

Asian airlines felt immediate shockwaves from the blasts, with investors worried about a sharp drop in tourist numbers to Asia selling off stock.

Australia's Qantas fell 2.5 percent to A$3.58, while Singapore Airlines slid one percent at S$10.20 and Thai Airways fell 0.7 baht to 24.80 baht.

Shares in Japan's All Nippon Airways, Japan Airlines System, and Cathay Pacific did not trade on Monday because of Japanese and Hong Kong holidays.

"Most of the key airlines in Europe which have flights to Indonesia and Bali will come down, Lufthansa and British Airways will react," said an Asian aviation analyst who declined to be named.

But it will be the Hindu-island of Bali that will be hit the hardest in Asia, facing a double whammy of the bombings and the fact that Australians, who make up one third of its annual tourist numbers, seem to be the worst hit by the explosions.

Fifteen Australians are confirmed dead, more than 100 injured, some critically burned, and 220 unaccounted for.

Australian tourists discovered Bali in the 1960s when its long-haired surfers first found its perfect waves. Fifty years later Australia's influence in Bali's tourism industry is omnipresent -- Foster's beer, batik-cloth beer bottle holders and surf shops.

"The weekend bombs in Bali will strike close to the hearts of many Australians," said The Australian newspaper's travel writer Susan Kurosawa. "For decades we have treated the island as a playground... Sadly, the Bali blasts could spell the end of our holiday love affair."

But Asian and Australian tour operators put on a brave face and said they believed Asian regional tourism should weather the fallout from the bombs provided there were no more attacks on holidaymakers.

However, Muslim nations Indonesia and Malaysia may be hit by collateral fallout from the bombings, with, rightly or wrongly, travelers associating the Bali bombings with Islamic militants.

Travel operators in Australia said on Monday they were surprised at the small number of cancellations after Saturday night's carnage, adding the tourism impact had been far less than the Sept. 11, 2001, attacks in New York and Washington.

"After Sept. 11 the fear factor was much greater," said Sue Smith, managing director of STA Travel in Australia, which specializes in the student and youth travel market.

"This time around, the calls we have been getting are from people considering their options, not cancellations," Smith said.

Smith said young travelers to Asia, aged 18 to 35, were "resilient" despite the attack on the Sari nightclub, one of their favorite haunts.

"After Sept. 11 the attitude was we would rather die on our feet than live on our knees," she said.

Flight Center, one of Australia's largest travel operators, was optimistic Asian tourism would survive the Bali bombings, saying most travelers to the region were not as conservative as Americans, who stayed at home in their droves post-Sept. 11.

"Traveling is such a part of the Australian psyche, they will not stop traveling -- they may change destinations," said Shane Flynn, Flight Center's chief executive officer.

"The Germans and Dutch are pretty hard-core travelers and they will go anyway," he said, adding Asians would travel as they would not see the Bali attack as aimed at them, but Westerners.

"They probably feel that being locals they will not be a target and they wouldn't be the kind of people that would frequent places like the Sari club," he said.

Smith said Asia was not one tourism market, unlike the United States, but several culturally and politically diverse markets.

He said some Asian destinations would suffer, most notably Bali, Indonesia and Malaysia but others like Thailand, Vietnam and Hong Kong may benefit.

"As long as things quieten down now, things will get back into full swing much quicker than you think," Smith said.

Asian-based tourism operators said the blasts were likely to have limited impact on year-end travel, a peak season, as people were likely to seek alternatives rather than cancel travel.

"It would dampen travel to a certain extent but not overly so. People will be much more selective in the destination they are going to," said Reene Ho-Phang, group director for marketing communications at luxury Banyan Tree Holdings resorts.

The Singapore-based leisure group has resorts on the Indonesian island of Bintan, Bangkok and Phuket in Thailand, as well as in the Maldives.