The S&P/ASX 200 Index (ASX: XJO) may be storming higher on Friday, but not all shares are doing the same.
One area of the market that is missing out on today’s rebound is the travel sector.
Here’s a snapshot of the sector at the time of writing:
- The Corporate Travel Management Ltd (ASX: CTD) share price is down 3%.
- The Flight Centre Travel Group Ltd (ASX: FLT) share price is 1.5% lower.
- The Qantas Airways Limited (ASX: QAN) share price is down 1%.
- The Webjet Limited (ASX: WEB) share price is down over 0.5%.
Why are travel shares underperforming today?
Today’s underperformance appears to have been sparked by comments out of the International Air Transport Association (IATA).
On Thursday the trade association for the world’s airlines warned that the impact of the pandemic on air travel was likely to be felt for many years to come.
In fact, the IATA estimates that passenger traffic won’t rebound to pre-crisis levels until at least 2023. This would be a blow for the likes of airline operators such as Qantas and travel bookers such as Flight Centre.
Though, the IATA’s director general and CEO, Alexandre de Juniac, told CNBC that he is optimistic that more planes will be in the skies in the next six weeks.
He said: “We are asking governments to have a phased approach to restart the industry and to fly again. We are aiming at reopening and boosting the domestic market by end of the second quarter, and opening the regional or continental markets — such as Europe, North America or Asia-Pacific — by the third quarter, and intercontinental in the fall.”
Mr de Juniac also revealed that he is against the idea of 14-day quarantine periods for travellers upon arrival. Given how this is arguably the length of a typical holiday, tourism markets are likely to struggle with restrictions of this nature in place.
He explained: “We are advocating with governments not to implement quarantine measures that will retain people for two weeks that will arrive anywhere. We think that it is useless provided we have implemented the health and sanitary controls that we are discussing with governments. It is absolutely key for the tourist industry which is so important for so many countries in Europe.”
It certainly looks like it will be an eventful few months for Australian travel shares.
Not sure about travel shares? Then take a look at these dirt cheap shares.
5 cheap stocks that could be the biggest winners of the stock market crash
Investing expert Scott Phillips has just named what he believes are the 5 cheapest and best stocks to buy right now.
Courtesy of the crashing stock market, these 5 companies are suddenly trading at significant discounts to their recent highs… creating what could be incredible opportunities for bargain-hungry investors.
Simply click here to scoop up your FREE copy and discover the names of all 5 cheap shares to buy now… before the next stock market rally.
Returns as of 7/4/2020
More reading
- Why Boral, Corporate Travel Management, United Malt, & Xero are dropping lower
- Broker tips 10 ASX 200 shares for a post-coronavirus recovery
- Why Beach, CBA, Qantas, & Xero shares are dropping lower
- Are ASX travel shares like Qantas great value?
- 5 things to watch on the ASX 200 on Thursday
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post Why Qantas, Webjet and these ASX travel shares are dropping lower today appeared first on Motley Fool Australia.
from Motley Fool Australia https://ift.tt/3bzjWTc
Leave a Reply