Just when you thought things couldn’t get any worse. As if the economic downturn wasn’t enough, we now have the looming threat of a global Swine Flu pandemic. As the world watches and waits, the nasty hybrid of a virus is slowly creeping its way around the world.

Sitting here in tiny Singapore we all wait for what the health authorities say is the inevitable spread from the one infected person on the island to the general population. At press time the count has already reached seven and the situation is repeating itself around the world.

But whether this will turn into the dreaded pandemic is not clear. It now appears at this stage that the virus is not as ferocious as first thought…but this could change. The question then, is what impact this would have on already fragile global supply chains and ultimately on the air cargo industry.

If the Mexican example mild as it was, is anything to go by global supply chains and the air cargo industry would likely be in serious trouble in the event of a pandemic. Consumers have unwittingly become highly dependent on sophisticated supply chains for everything from daily consumer goods, to food to pharmaceuticals. The just-in-time facet of modern supply chains means inventory levels are kept at the barest minimum and disruption in supply would rapidly impact economies the world over.

In a bid to try and nip the initial outbreak of the virus in the bud, the Mexican government, very early on, cancelled public events, closed restaurants and bars, etc. It also suspended production at a number of manufacturing plants to prevent the virus spreading through the workforce.

Th is had an immediate impact on the supply chains of mostly US manufacturers who rely on the Mexican-made components. The Mexican government estimates that all these actions will result the country’s GDP down by between 0.3-0.5 per cent – not an insignificant figure in this current environment.

Luckily in the Mexican case, the viral spread was relatively mild. But should a true pandemic set in, production would likely grind to a halt and even those that continued to operate would face severe difficulties moving their goods.

Governments could also resort to closing their borders; something that is highly plausible given for example, China’s immediate quarantine of all Mexican’s arriving in the country regardless of whether they showed any flu symptoms.

An air travel ban or simply governments urging their citizens not to travel to affected areas as several did in the Mexican case would see passenger traffic plummet forcing capacity out of the market. With so much cargo moving the bellies of passenger aircraft, supply chains would clearly be impacted. There is also the very real possibility that the pandemic would affect the human component of carriers – both cargo and passenger – airports, ground handlers, air traffic control and so on.

For now, there is relative stability and calm in the face of this new global challenge and all the world can do is continue to monitor whether the virus mutates into something more serious as work continues on developing vaccines.

One important lesson that should be taken away from the Mexican example is the simple fact that fear of a pandemic is potentially just as damaging as a realpandemic.