Why did the Flight Centre share price tumble 15% in June?

The Flight Centre Travel Group Ltd (ASX: FLT) share price struggled last month despite the company’s silence.

After finishing May at $20.50, Flight Centre shares were swapping hands for just $17.36 at the final close of June. That represents a 15.32% tumble.

For context, the S&P/ASX 200 Index (ASX: XJO) fell around 9% over the course of June.

So, what’s been weighing on the travel giant’s stock lately? Let’s take a look.

Flight Centre share price falls 15% in June

The Flight Centre share price underperformed last month. Though, it wasn’t alone in its suffering.

It was joined in the red by fellow ASX travel shares Qantas Airways Limited (ASX: QAN) and Webjet Limited (ASX: WEB). They fell around 19% and 11% respectively last month.

And while there wasn’t any price-sensitive news from Flight Centre in that time, it did make a number of headlines.

First, the company announced it would invest between $30 million and $35 million in staff retention.

It will do so by offering around 10,000 staff members additional share rights, as long as they stay with the company through the COVID-19 recovery phase. Eligible staff members will be offered a one-time grant of share rights valued at $3,750.

Additionally, ASX-listed airline Regional Express Holdings Ltd (ASX: REX) announced it had partnered with Flight Centre last week. The deal will see Rex become Flight Centre’s “partner of choice” over the next 10 years.

Of course, it’s worth looking at the broader travel industry to garner insights into the Flight Centre share price’s performance.

National Australia Bank Ltd (ASX: NAB) recently found Australians spent more on international flights in May 2022 than in May 2019.

Similar findings were released by Tourism Research Australia. It noted Australians took fewer trips in March 2022 than in the same month of 2019, but spent more to do so.

However, with the rising cost of living and household cash flows tipped to ebb, Australians’ spending on holidays could soon backtrack.

And finally, Flight Centre remains the most shorted share on the ASX. As of 27 June, 16% of the company’s shares were in the hands of short-sellers.

The post Why did the Flight Centre share price tumble 15% in June? appeared first on The Motley Fool Australia.

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More reading

• What is holding back the Flight Centre share price today?
• Flight Centre share price struggles amid dwindling household cashflows forecast
• Here are the top 10 ASX shares today
• These are the 10 most shorted ASX shares
• These 2 ASX travel shares are tying the knot for the next 10 years

Motley Fool contributor Brooke Cooper 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 Flight Centre Travel Group Limited and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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