China has not yet reported a human infection from the bird flu, which has killed more than 60 people in Asia since 2003. But the disease has been spreading rapidly among wild and domesticated birds around the world and scientists say it could potentially mutate into a form that can be transmitted between humans.

"If human-to-human infections become widespread ... the travel industry will be significantly impacted as in the case of SARS," James Liang, the chief executive, said in a conference call on Friday with investors and analysts. "However, we expect the impact to be short term," he added.

Liang was referring to Severe Acute Respiratory Syndrome, which sheared two percent off of global output in the second quarter of 2003, hitting travel-related firms particularly hard.

In a report, the World Bank said this week an influenza pandemic could inflict losses of about $200 billion in global output in one quarter or $800 billion over a year.

Ctrip, which is 22 percent owned by Rakuten Inc. (4755.Q: Quote, Profile, Research), Japan's biggest shopping mall operator, posted third-quarter earnings of 65.5 million yuan ($8.1 million), or 49 cents per American Depositary Share, compared with a year-earlier profit 38.3 million yuan.

The results far outpaced the Shanghai-based company's prior conservative forecast of year-to-year revenue and net profit growth of around 40 percent. The company maintained its estimate for fourth-quarter net revenue growth of around 40 percent.

Third-quarter growth was driven by a 160 percent jump in air-ticketing revenue to 46.0 million yuan. Hotel reservations grew 29 percent to 96.2 million yuan during the third quarter.

Gross margin dipped to 83 percent from 86 percent for the same period in 2004 and 85 percent in the second quarter of 2005, largely due to a rise in the cost of services.

The company is China's biggest online travel agent, with eLong Inc. a serious competitor. U.S. online travel giant Expedia Inc. bought a majority stake in eLong last year.

China's travel industry is expected to grow rapidly as living standards rise, but competition is also intensifying as U.S. travel giant Cendant Corp., operator of the popular Orbitz travel Web site, has formed a local joint venture.

Source: Reuters