TT. Tui Travel

Shares in U.K.-listed airline and travel companies, including British Airways PLC (BAY.LN), Carnival PLC (CCL.LN) and Thomas Cook Group PLC (TCG.LN) fell sharply on the London bourse Monday morning following the outbreak of the Swine Flu in Mexico City, which has spread to the U.S.

Blue Oar Securities analyst Mark Brumby says it's bad news for the travel industry, which is already struggling from falling demand as consumers stay at home during the economic crisis. The industry was hit hard by outbreak of the severe acute respiratory syndrome, better-known as SARS, in Asia a few years ago.

"Without scare-mongering, it is worth pointing out the current outbreak of swine flu, which is centered on Mexico but which has spread to the U.S., is unlikely to do much to encourage travel.

"Indeed in recent years the SARS and avian flu scares have depressed travel volumes materially," he added.

A spokesman for British Airways, which operates four flights a week to Mexico City, told Dow Jones Newswires Monday that it's "operating as normal."

Irish budget airline Ryanair Holdings PLC (RYA.LN) doesn't fly to Mexico City or any other transatlantic city, a company spokeswoman said.

Carnival, Thomas Cook, easyJet PLC (EZJ.LN), InterContinental Hotels Group PLC (IHG.LN) and TUI Travel PLC (TT.LN) couldn't immediately be reached for comment.

British Airways is the biggest faller on the bellwether FTSE 100 index, down 12 pence, or 7.6%, at 152 pence, with Carnival in second place, down 122 pence, or 6.3%, at 1817 pence at 0748 GMT.

Thomas Cook shares fell 16 pence, or 5.7%, at 267 pence, while InterContinental shares dropped 32 pence, or 4.8%, at 640 pence. The FTSE 100 is down 1.2%.

Company Web site: http://www.britishairways.com

-By Lilly Vitorovich, Dow Jones Newswires; 44-0-207 842 9290; lilly.vitorovich@dowjones.com

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