American cosmetics company Estée Lauder has said that its sales this year will be effected.
Many companies, both American and foreign, with high interest in the region have restricted travel to and from the affected areas. Honda has evacuated it's Japanese employees from the at risk' areas. Motorola (one of the largest foreign investors of China) has reduced travel as well. Some corporations have banned all travel to at risk' areas. Wal*Mart has banned all staff from visiting China, Hong Kong, Singapore, Vietnam, and Toronto.
The decline in travel has already had an effect on demand for fuel. The Organization of the Petroleum Exporting Countries (OPEC) estimates that SARS has reduced Asian oil demand by 300,000 barrels per day. Companies outside of Asia are also being affected. Both American Airlines and United Airlines have partially blamed SARS for recent weakening demand. Lufthansa, will ground 15 more planes and reduce working hours for ground staff because the demand on its Asian routes has fallen by as much as 85%. According to Rod Eddington (British Airways' CEO); "the combination of SARS, the war in Iraq and a weak economic outlook mean that the global airline industry is facing its toughest crisis in living memory."" Airbus warns that its target of delivering 300 planes this year now carries "a higher degree of risk-.
What does this mean? For some companies, it means that consumer relations may be at risk. For instance, Gap has had some problems recently with sales. They are now on the rebound and are regaining credibility with consumers. However, because of restrictions on travel to at risk areas, they are unable to send quality assurance teams to it's suppliers. This may allow low quality products to seep into their supply where it will again ruin customer confidence.
The most vulnerable sector though, is the technology industry. Eighty-five percent of personal computers and more than half of the silicon chips for the world are assembled in Asia.