2 ASX travel shares that flew higher than Flight Centre (ASX:FLT) in 2021

The paper planes, one going straight and the others faltering, indicating strong competition between airlines

The Flight Centre Travel Group Ltd (ASX: FLT) share price provided shareholders with a reasonable return in 2021. While the company contested with ongoing COVID-19 impacts, shares began to lift off, rising 11.2% by the end of the year.

However, the gain proved not enough to outpace the S&P/ASX 200 Index (ASX: XJO). The market’s collection of the top 200 companies achieved a 13% return before dividends. While it wasn’t to be for Flight Centre shareholders, there were 2 ASX travel shares that went above and beyond the benchmark index.

Let’s take a look at the 2 travel companies that performed better than Flight Centre on the ASX last year.

2 shares flying over the top of Flight Centre on the ASX

In 2021, there were 2 ASX travel shares that exceeded expectations, despite being exposed to the same perils as Flight Centre. These companies were Corporate Travel Management Ltd (ASX: CTD) and Sydney Airport (ASX: SYD). So, what was it that set these investments apart from their less fortunate peer?

The answer for Sydney Airport is quite an obvious one for anyone who followed the merger and acquisition space last year. On 5 July 2021, Australia’s largest airport received a buyout offer for $22.6 billion in an all-cash transaction.

Shares in Sydney Airport quickly responded to the $8.25 per share offer, rising 37% on the day. As the year went on, this offer was increased to $8.75. Prior to the offer, Sydney Airport shares were 9.4% below where they had started the year at. If not for the buyout, the airport operator might have been in a similar position as ASX-listed Flight Centre.

Meanwhile, Corporate Travel Management did not have a buyout offer to boost its share price. Instead, investors might have been more optimistic for this ASX travel share’s bounce back.

Unlike Sydney Airport and Flight Centre, Corporate Travel has had zero debt on its books since March 2020. Simultaneously, the company had cash piled up to the tune of $100 million throughout last year.

Furthermore, shareholders were informed in April 2021 that the company had broken even in March and was expecting positive underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) in the fourth quarter.

As it turned out, Corporate Travel Management returned to positive EBITDA in the second half. Notably, the ASX travel share announced the acquisition of Travel & Transport in September.

With these drivers behind it, the Corporate Travel Management share price gained 25.8% in 2021.

The post 2 ASX travel shares that flew higher than Flight Centre (ASX:FLT) in 2021 appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Corporate Travel Management Limited and Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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