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Date : 22/10/2021

Experts Are Seriously Considering These Travel Stocks To Boom Again

Why Are Investors Closely Monitoring Travel Stocks On The ASX?

October is often referred to as the “crash” month. Will history repeat for the ASX 200? Well, the great crashes of 1929, 1987 and 2007 all happened in October. Already, stock markets have looked nervous the past few weeks.

Following a downturn for the broader market since the middle of August, the ASX looks to have shaken off the shackles once again as the ASX 200 is back on a positive momentum.

Travel stocks have been extremely bullish off late as Australia’s domestic border restrictions are set to ease. To provide a further boost, Australia is now also gearing up to open international borders after more than 18 months. Things haven’t looked this bright for the travel sector since the pandemic hit, and given that we have some of the top travel stocks in the world here in Australia, here are one’s to consider.

Flight Centre Travel Group (ASX: FLT)

Flight Centre Travel Group is one of the world’s largest travel agency groups. The company operates in more than 23 countries and owns an extensive corporate travel management network in more than 90 countries.

FLT is one of the most interesting opportunities now on the ASX. Hence, the company’s shares have been flying recently. Flight Centre shares soared to an 18-month high in September. The travel agent has been busy targeting a return to leisure and corporate profitability as conditions improve. This has led FLT to track 30% higher over the past month. In comparison, the ASX 200 has slumped by more than 4%.

Flight Centre reported an increase in sales revenue month-on-month during FY21. Particularly with leisure and corporate recovery in the United States during Q4FY21 ticked up a notch. The company noted that corporate transaction numbers were at 50% of pre-COVID levels, representing around 40% of the total transaction value.

In addition, vaccination programs have gained momentum. Travel restrictions are also lifted in key travel markets. As such, immediate and strong rebounds are being experienced.

It’s been a solid year for Flight Centre. FLT shares currently trade at $20.29 and it is prime time to consider them.

Webjet Ltd (ASX: WEB)

Webjet is engaged in the provision of online travel bookings. The Company is in the digital travel business providing services in regional consumer markets. Webjet is also involved in global wholesale markets via its online channel. In short, the company operates through the segments, including Travel B2C and B2B.

This week has been a tumultuous week for Webjet shares. Hence, the online travel agent’s stock roared higher on Monday, hitting a new 52-week high. Unfortunately, it has since tumbled. Indeed, the dip has come about despite renewed enthusiasm surrounding Australia’s return to travel. Furthermore, the nation’s vaccine rollout is surpassing a key milestone.

At the time of writing, the Webjet share price is $6.32. The WEB share price has been tumbling lower on a week full of good news for Australians in need of a holiday. Prime Minister Scott Morrison announced that Australia’s borders are set to reopen next month in line with some states allowing home quarantine. When the order is officially given, Australians who are vaccinated against COVID-19 will be allowed to fly in and out of the country freely. Although, a seven-day quarantine in their home on their return might be mandatory.

As travel resumes, Webjet might benefit from this positive momentum. Right now, the company’s share price is 24% higher than it was at the start of 2021. It has also gained 54% since this time last year.

Qantas Airways Ltd (ASX: QAN)

Despite the good news of an imminent reopening of the borders, Qantas shares have not taken off yet. Qantas ended the day at $5.70 per share.

Why is the Qantas share price still stalling?

The news from the Australian Competition and Consumer Commission, or ACCC did affect Qantas. This commission has denied Qantas to collaborate with Japan Airlines. However, the two airlines planned to work together on routes linking Australia and Japan. The other concerns might be about the surging oil prices and slowing economic growth. This could weigh on the airlines’ profits.

However, on a positive note, the Qantas share price is taking off since the last three-month by 15%. This comes as the company intends to soon begin operating flights between Brisbane and Launceston for the first time. The new flights will see an extra 15,000 seats available to fly between the cities each week.

Qantas is ramping up its domestic operations. Thus, it is the eighth new route the airline has introduced since Australia’s international borders shut. According to the company, demand for flights to and from Tasmania has increased alongside the number of Australians’ seeking out domestic holidays.

The Qantas share price gained momentum last month when it announced its domestic operations were 95% cash-flow positive over FY21.

 

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