The Flight Centre Travel Group Ltd (ASX: FLT) share price has bounced from green to red … and back to green today.
At the time of writing, Flight Centre shares are up 1.05% to $18.28.
Yesterday, the Flight Centre share price tumbled by almost 11% as the travel company came under pressure on two fronts.
Flight Centre share price hit on two fronts
First, the company released its half-year results.
While revenue almost doubled year-on-year, the continuing impacts of COVID travel restrictions resulted in a 4% increase in the underlying loss after tax to $188 million.
Second, of course, was news breaking of Russia’s invasion of neighbouring Ukraine. News that saw the S&P/ASX 200 Index close the day down 3%.
With the pandemic (hopefully) entering its final stages, Flight Centre’s managing director Graham Turner said yesterday:
After two years of lockdowns and heavy restrictions, we are now seeing the strongest indicators of a return to normalcy. Borders are now generally open and some governments, particularly in Europe, are starting to treat the virus as endemic.
But now, it’s a conflict in Eastern Europe that could impact global travel and the Flight Centre share price.
Global travel recovery likely to slow
Addressing the Russian incursion into Ukraine, Turner said (quoted by the Australian Financial Review): “I think it will slow the recovery down over the next few months … particularly the UK, Europe.”
Turner didn’t expect the conflict to have a significant impact on travel in Australia and the United States.
Flight Centre’s EMEA division represented some 20% of its transactions in 1H FY22. A significant fall in that division could put further pressure on Flight Centre shares.
But Turner is hopeful the impact of the crisis in Ukraine will be relatively short term, as with some previous conflicts that the company has worked through.
According to the AFR, Turner cited the Gulf War in describing the impact on the appetite for travel. He said his organisation had suffered for a couple of months when coalition forces retook Kuwait in 1991. The September 11 terror attacks also affected fearful markets for almost four months.
Flight Centre share price snapshot
Flight Centre shares are down 1.66% so far in 2022, outperforming the 7.6% year-to-date loss posted by the ASX 200.
The post How might the Ukraine crisis impact the Flight Centre (ASX:FLT) share price? appeared first on The Motley Fool Australia.
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More reading
- 5 things to watch on the ASX 200 on Friday
- ASX wipes out $73 billion as Russia invades Ukraine
- Why Appen, City Chic, Flight Centre, and Life360 shares are sinking
- ASX 200 (ASX:XJO) midday update: Appen and Life360 crushed, Flight Centre posts $188m loss
- Flight Centre (ASX:FLT) share price tumbles after posting $188m half year loss
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 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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