The first human case of H5N1 avian flu was reported in 1997 but many businesses are only now starting to plan how they would cope with a pandemic that could result in 30% of their staff being off work sick for six months.

British Airways, which began studying the effects of a pandemic in April last year, is ahead of many other companies. But the airline is still working out how it would keep flying with a quarter of its staff struck down by flu. A spokeswoman said: “We are looking at what it means and how we would use our resources.” Glaxo Smith Kline says it is making preparations but has “no grand plan” yet.

Last week, the Royal College of Surgeons hosted an “avian flu summit” designed to shock business into action. Delegates from 300 firms in the financial, transport, retail and manufacturing sectors heard what they should be including in their “disaster plans”. The keynote speaker, David Salisbury, head of immunisation at the Department of Health, said businesses should be planning for the “worst case scenario” in which 25% of the population, or 14.6m people, would come down with the flu. Judging by previous influenza pandemics, between 0.2% and 2% of the population would die, according to the World Health Organisation.

Small firms could be particularly hard hit as workers fall ill or stay off to look after sick relatives, scientific models by the independent Health Protection Agency show.

Firms would have to act swiftly to halt the spread of the disease if they wanted to keep trading. But many have yet to put contingency measures in place, and are hungry for guidance. Thursday’s conference — called Pre-Pandemic Planning, Preparation & Policy for Business — sold out so quickly that another one is planned for the end of February by the organiser, the risk-management training group Business Forums International (BFI).

Elizabeth Smith at BFI said most firms’ bird-flu action plans were “at the embryonic stage”. But many of the delegates she saw last week were from companies with developed plans ensuring that they were on the right track, as well as those that wanted to update their information on the virus.

There are 15 different types of bird flu. Spanish flu, which killed up to 30m people between 1918 and 1919, was a bird flu. H5N1 is the strain now causing worldwide alarm because of its ability to jump from birds to several other species. Transported by migratory birds, it is lethal to poultry and has infected many people who have been in close contact with sick birds, killing 79, most of them in southeast Asia. But it has yet to mutate into a form that can jump from person to person. If it does, the result is likely to be a global pandemic.

Two drugs on the market, Roche’s Tamiflu and Glaxo Smith Kline’s Relenza, lessen the symptoms of the disease and may slow its spread. But there is no cure for H5N1 yet.

In the last century there were three deadly flu pandemics and experts believe another is overdue. A pandemic could cost the global economy £455 billion, the World Bank estimates. In Britain it could have devastating consequences for the City.

Contingency planning has become common at financial firms since the September 11 attacks in 2001 brought Wall Street to a halt and depressed world markets for months. The Financial Services Authority, the City regulator, is including bird flu in its risk assessment for 2006, to be published on Wednesday. The government recommends firms establish minimum staffing levels and identify essential workers.

HSBC, the banking giant, is devising ways of operating with half its staff. They could be asked to work from home or via video link and teleconference facilities.

Boots, the health-and-beauty retailer, said a bird-flu pandemic was one of the scenarios being built into its routine contingency planning. The company’s Jayne Mayled said: “We are both an employer of 65,000 people and a health-service provider. These two things are entwined — we provide a service and help keep people well.”

Its pharmacists could be seconded from head office to individual stores, and drug deliveries made to GPs in bulk to ensure that drugs to alleviate the flu were widely available.

Doing nothing is no longer an option. The Sars virus may have turned out to be a near miss with just 8,000 cases and 774 deaths worldwide. But bird flu is being seen as a different matter. The WHO’s director-general, Lee Jong-wook, warned that an outbreak in Britain was “inevitable and possibly imminent”.

Governments are taking the threat seriously and last week pledged £1 billion to fight avian flu in the worst-affected countries.

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