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Date : 28/06/2021

QAN Share Price Dropped On New Travel Restrictions

The ASX 200 closed 0.1% lower today as Technology and Travel sectors weighed the market down. The Sydney and Darwin lockdowns, the growing clusters, and the widespread border closures resulted in travel stocks being sold off. Afterpay and Zip, always seem to be making headlines, and today was no different as both – APT shares and ZIP shares were dragged down by over 7% each. Among the travel sector, Qantas and Webjet led the losses with the QAN share price sliding 4% and WBT shares going down 4.7%.

It wasn’t just investors looking for Qantas news today, there have been a lot of travelers stranded with flight cancellations and new travel restrictions now in place. Among the biggest winners today were Kogan and Redbubble – the stocks of the lockdown theme, gaining 6.6% and 8.2%, respectively.

Why is Qantas Share Price back down to 2020 levels?

Once regarded as one of the best dividend stocks on the ASX, Qantas shares has dropped and had a tough time recently, however, the QAN share price recovery has been good following the impacts of Covid-19. Amid the 4.4% slide today, ASX: QAN shares are now trading at levels we were used to in 2020. Since those lows, the company has been on track in its recovery. A sustained rebound in domestic travel demand, and the performance of its Freight and Loyalty divisions, drove the recovery  of QAN share price from the impacts of COVID-19.

Based on trading conditions in March, ASX:QAN expects the statutory free cash flow to be positive for the second half of FY21. Net debt levels peaked in February at $6.4 billion and are expected to be lower than they were in December ($6.05 billion) by the end of the financial year. At a statutory level before tax, Qantas is expecting a loss in excess of $2 billion, which includes the significant costs associated with previously announced redundancies, aircraft write downs and non-cash depreciation charges.

All this however will now be up in the air with Sydney’s growing cluster of coronavirus cases and lockdowns. NSW sees the most air traffic in the country and with flights now put on halt, Qantas’s ability to hit those guidance may now be hindered. As a result, the Qantas share price slid today, and there may be further downward pressure on the QAN share price if Sydney’s coronavirus positive cases continue to multiply. QAN shares currently trade $4.54 a share following today’s dip.

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