Terrorism Fear Strikes At Tourism Players
The Age
Tuesday October 15, 2002
Travel industry stocks Qantas, Flight Centre and the recently-listed BreakFree yesterday were hit hard by investors fearful of a plunge in travel to Bali.
Qantas fell nine cents to $3.58, as analysts warned that the exodus of Australians from the fast-growing Bali tourism market would derail the airline's push to expand in Asia. Analysts said Qantas derives 5 per cent of its revenue from travel to Bali.
Flight Centre, which runs Australia's biggest travel agency, fell 31 cents to $22.54, while BreakFree, the operator of so-called ``schoolies week" tours that listed just last month, fell three cents to $1.45. BreakFree said it expected a rise in its domestic tourism would make up for the fall in travel to Bali.
``Bali holidays is a very small part of the company constituting less than 1 per cent of the overall 2003 financial year revenue of the group," said chief financial officer Randall Deer.
The president of the Australia-Indonesia Business Council, Eric de Haas, pointed to Coca-Cola Amatil, Commonwealth Bank and subsidiaries of Leighton Holdings as those with a high profile in Indonesia.
``People are factoring in the immediate situation and not really thinking so much about the long-term aspects yet," he told The Age.
A sustained terrorist campaign would constitute a new level of threat, Mr de Haas said. ``A lot depends on the direction the Indonesian government takes.
``People in Jakarta probably won't withdraw at this stage, but if there are further bombings, you will see a strong reaction."
Coca-Cola Amatil fell 15 cents to $5.38. It has 10 bottling plants in Indonesia employing 8500 people. In its last full financial year ending December, Indonesia contributed $396 million in revenue and $36 million in pre-tax profits, about 12 per cent and 10 per cent of Amatil's respective group totals.
Spokesman Alec Wagstaff said it had been ``a difficult environment for some time" and Amatil had operated on heightened security since September 11 last year. He said fewer than 10 Australians worked in the Indonesian subsidiary and there were no plans to withdraw them.
``(Coca-Cola) is seen as a symbol of American investment but we've been working on that. It's quite a local business, our customers are local and we've got pretty good links with local communities."
Among other companies, Commonwealth Bank rose 48 cents to $28.90. It has a joint venture in the Astra CMG Life insurance business and two years ago bought out its partners in the PT Bank Commonwealth venture.
Leighton, whose Thiess mining contracting group is involved in various projects in Indonesia, gained two cents to $9.51.
Two-way trade between Australia and Indonesia totalled $5.5 billion in 2000-01. Indonesia is Australia's tenth export market and ninth largest source of imports.
In figures for 1999-2000, Victorian exporters enjoyed a rebound in sales in Indonesia, led by aluminium, textiles and food products, predominantly dairy products such as milk powder.
BUSINESS 4 Terror fear take toll
© 2002 The Age
