* Says media-fuelled flue fears destroying summer bookings
* Effect of flu worse than economic crisis
* Shuts 8 of 10 hotels in Mexican resort of Cancun
By Ben Harding
MADRID, May 6 (Reuters) - The owner of Globalia, Spain's biggest travel firm, said on Wednesday that media-induced panic over the new flu virus was destroying summer bookings and could sweep away airlines and operators already weakened by the economic crisis.
Juan Jose Hidalgo said his group, which includes hotels, travel agencies and airline Air Europa, had tripled profits in the October-March period despite the economic crisis. Then came swine flu, accompanied by television news clips of tourists wearing face masks boarding planes leaving Mexico, the epicentre of the outbreak.
"These images have frightened everyone. It's totally unjustified. You can't create this alarm," he told Reuters in an interview in his office on the outskirts of Madrid.
"It could finish airlines, agencies, tour operators, if it does not stop it could carry all before it.
Globalia, which made revenues of almost 4 billion euros ($5.33 billion) last year, on Sunday shut eight of its 10 hotels in the Mexican resort of Cancun and has cut back five of its six weekly flights there.
Hidalgo said seven out of eight reservations to Cancun had been cancelled, and fears over the flu that has killed 44 people so far were badly affecting reservations to all its international destinations at a crucial moment for summer bookings.
"We have more problems because of the flu than from the economic crisis. Things were going along normally, we were relaxed until 15 days ago and then the flu paralysed everything," the 67-year-old said.
"It has had a very negative effect on my business at a time when summer holidays are booked. We will not meet the summer forecasts we had. It all depends on all this news," said Hidalgo, who started the business in the 1960s, ferrying migrant workers from poor central Spain to Switzerland in a second-hand Mercedes.
He bought buses, before expanding his empire to more than 1,200 travel agencies, over 30 hotels, car hire firm Pepecar and Spain's second-largest airline Air Europa -- part of the SkyTeam alliance.
The company will wait until the end of May before deciding whether to restart flights, re-open hotels, or start laying off staff he said. He added that it was impossible to take any big strategic decisions -- such whether to amend an order for eight Boeing 787s -- for another month or two until the flu situation was clearer.
The unlisted firm almost tripled profits in the first half of its financial year, he said, thanks to cheaper fuel and cost savings.
In the face of lower passenger traffic on Spanish and European flights, Air Europa has slightly reduced its fleet of mostly-leased 737s and is buying 11 Embraer 195s, which carry 120 passengers -- 50 fewer than the Boeings -- and burn 30 percent less fuel, a spokesman for the group said. (Reporting by Ben Harding; Editing by Rupert Winchester)