How did ASX 200 travel shares go in FY22?

The S&P/ASX 200 Index (ASX: XJO) has a number of ASX travel shares within its ranks.

There are a few different players, including travel agents and an airline. Readers may have used some of their services including Qantas Airways Limited (ASX: QAN), Webjet Limited (ASX: WEB), Corporate Travel Management Ltd (ASX: CTD) and Flight Centre Travel Group Ltd (ASX: FLT).

The last two and a half years have obviously been all about COVID-19 for the travel sector. International travel went into hibernation and domestic travel plunged.

But since the rollout of national and global vaccination initiatives, those barriers to travel have started coming down.

Let’s look at how the share prices of the ASX 200 travel shares travelled during the last financial year.

Mixed returns for ASX 200 travel shares in FY22

The Webjet share price went up by 8.75%.

The Flight Centre share price rose by 16.9%.

The Qantas share price dropped 4%.

The Corporate Travel Management share price fell 14%.

Of course, those returns are just for a specific 12-month period. The returns are different over different periods including since the start of COVID, compared to the last five years, and so on.

Each of these businesses has different elements contributing to their recovery. For example, Corporate Travel’s recovery is with a focus on business customers. Flight Centre benefits from consumers going on holidays again, while also making the most of a COVID-19 ‘reopening’ factor.

People fly on Qantas planes for both corporate and leisure reasons, but there are also costs that investors have to factor in. Oil prices have soared since the start of 2022 amid the Russian invasion of Ukraine, which caused uncertainty and impacted the global supply and demand balance for oil.

Recovery comments

The share prices of the ASX 200 travel shares (and most shares) are usually forward-looking. So let’s see what the companies recently said.

After releasing its FY22 result, Webjet said:

Trading continues to improve on the back of demand and opening borders. First quarter trading for the group is currently tracking well ahead of FY22 fourth quarter at bookings, TTV [total transaction value], revenue and EBITDA [earnings before interest, tax, depreciation and amortisation] levels. April was our most profitable month since the pandemic began with all our businesses delivering profits. May’s profitability is expected to significantly exceed that of April.

In May 2022, Corporate Travel Management said it expects to be more than 75% larger than 2019 at full recovery. The company is expecting “strong” revenue and EBITDA momentum going into FY23. And it is expecting FY22 fourth-quarter revenue to beat 2019 levels.

In June 2022, Qantas said that travel demand remains strong across all categories. However, it recently announced a reduction of 15% in domestic capacity in the short term to assist with the recovery of sustained high fuel prices. However, there were no changes announced to its international capacity plans. The airline expects capacity to be 70% of pre-COVID levels by the end of the FY23 first quarter. By the FY23 fourth quarter, it expects to reach 90% of pre-COVID levels.

In May 2022, Flight Centre said its recovery is well underway and that it generated an EBITDA profit in March 2022. It also said that TTV is rebounding “strongly” globally as it gains market share.

In August, we’ll hear results from ASX 200 travel shares Flight Centre, Qantas and Corporate Travel Management, and probably trading updates as well.

The post How did ASX 200 travel shares go in FY22? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison 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, 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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