The nightmare continues for ASX travel shares on the markets today.
Despite the S&P/ASX 200 Index (ASX: XJO) posting a mild fall (down 0.44% to 4,930 points at the time of writing), the travel sector continues to be sold off.
Flight Centre Travel Group Ltd (ASX: FLT) has posted a shocking drop of 24.73% to $11.15 a share. For a company that was exciting investors just two months ago by reaching towards $50 a share, today's moves are a devasting reminder of how much strain the travel sector is under right now.
Similarly, Corporate Travel Management Ltd (ASX: CTD) shares have also lost an eye-watering 25.69% today and are going for just $4.86 at the time of writing. This was a stock going for $22 just two months ago.
Qantas Airways Ltd (ASX: QAN) are also feeling the pressure today. Qantas shares have lost another 11.46% today and are going for $2.24. Again, this was a $7 stock in January.
Are there buying opportunities in the ASX travel sector?
Of course, with the travel industry in almost total lockdown and Australians abroad being asked to return home, these companies are without a doubt facing their darkest hour right now.
The government is trying to do what they can, but it's difficult knowing exactly how to approach these companies in the current environment. Uncertainty abounds – we don't know if the current restrictions will last a month, six months or even a year at this point.
Corporate Travel, Qantas and Flight Centre are all well-run companies with strong management teams. All were doing very well prior to this outbreak.
But this is a 'black swan' event of the highest order – and there is no possible way for a travel company affected by this situation (regardless of how well-run it may be) to avoid this catastrophe.
Although these share prices are at rock-bottom (and are almost assuming these companies are heading for bankruptcy), I still think there is too much uncertainty for a substantial investment.
Warren Buffett likes to say that "the first rule of investing is don't lose money" and I don't think any of these companies are in a position to safeguard against this rule right now.
A crazy-brave investor might consider a deep value position today, but I think that there are more certain opportunities out there in the current market.
