Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB) shares have been very strong performers in early trade on Tuesday.
At the time of writing the Flight Centre share price is up 14% to $16.41 and the Webjet share price is up 16% to $4.98.
Image source: Getty Images
Why are Flight Centre and Webjet shares zooming higher today?
This morning Australian travel companies woke up to the news they've been waiting a long time to hear – an effective COVID-19 vaccine appears to have been developed.
Overnight, US biotech giant Pfizer released the first set of results from its phase 3 COVID-19 vaccine trial. Those results provided the initial evidence of its vaccine's ability to prevent COVID-19.
According to the release, the vaccine candidate was found to be more than 90% effective in preventing COVID-19 in participants without evidence of prior SARS-CoV-2 infection in the first interim efficacy analysis.
This is a very big deal, especially given how even Pfizer felt 60% to 70% effectiveness would be a decent result.
While there is still more data to be collected and safety milestones to be achieved, if everything goes to plan the vaccine could be rolled out before the end of the year.
Pfizer advised that, based on current projections, it expects to produce globally up to 50 million vaccine doses in 2020 and then up to 1.3 billion doses in 2021. The Australian government has previously secured 10 million doses of the vaccine.
If the vaccine is developed and rolled out successfully globally, it could mean a much swifter rebound in the travel market than many had even dreamed of.
This would be great news for Flight Centre and Webjet. Both companies are burning through large amounts of cash at present as travel booking volumes sit at just a fraction of pre COVID levels.
