Why are ASX 200 travel shares having such a stellar session?

A woman reaches her arms to the sky as a plane flies overhead at sunset.A woman reaches her arms to the sky as a plane flies overhead at sunset.

ASX 200 travel shares are leaping today after Flight Centre delivered some good news to the market.

Travel shares rising today include Flight Centre Travel Group Ltd (ASX: FLT), Qantas Airways Limited (ASX: QAN), and Webjet Limited (ASX: WEB).

Let’s take a look at how ASX 200 travel shares are performing today.

Why are ASX 200 travel shares rising today?

Flight Centre shares are 4% higher, while the Webjet share price is leaping 1.79%. Qantas shares are also up 2% today.

Investors appear to be encouraged by Flight Centre’s FY22 market guidance, released today. The travel company reported its underlying EBITDA loss will be less than expected. The company is expecting to break even on an underlying EBITDA basis for the first six months of this calendar year.

The company also provided broader insight into the travel market, potentially providing hope for fellow ASX 200 travel share investors.

Flight Centre said “demand accelerated” after the government relaxed travel restrictions. Managing director Graham Turner said:

The scale of our recovery exceeded our initial expectations and meant that we should now
exceed our preliminary FY22 result target, with early trading results pointing to a breakeven
second half result and a healthy fourth quarter profit (underlying EBITDA).

There will inevitably be ongoing challenges for the industry over the next six to twelve
months as new strains of the virus emerge, airline capacity returns and as we rebuild staff
numbers to required levels, but we feel that we are well placed to overcome these concerns
given our corporate business’s continued rise and our leisure business’s ongoing strength.

Meanwhile, the Federal Government has resisted calls from the Opposition to close Australia’s borders to Indonesia due to Foot and Mouth disease. Deputy Prime Minister Richard Marles said the government’s response is “significant. He said in comments cited by Nine News:

We have got more biosecurity officers on the job. We’re looking putting in place the biosecurity zones around a number of our airports.

The post Why are ASX 200 travel shares having such a stellar session? appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea 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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