One of the best performers on the S&P/ASX 200 Index (ASX: XJO) last week was the Webjet Limited (ASX: WEB) share price.
The online travel agent's shares raced an incredible 18% higher over the five days to end the week at $4.95.
Why did the Webjet share price race higher last week?
Investors were fighting to get hold of travel shares last week after news broke of a potentially effective COVID-19 vaccine.
On Monday US biotech giant Pfizer released the first set of results from a phase 3 COVID-19 vaccine trial. Those results appear to show the initial evidence of its vaccine's ability to prevent COVID-19 infections.
According to the update, in the first interim efficacy analysis, the vaccine candidate was found to be more than 90% effective in preventing COVID-19 in participants with no evidence of prior SARS-CoV-2 infection.
This is significantly better than even Pfizer was hoping and would be notably more effective than traditional flu vaccines. According to the US Centers for Disease Control and Prevention, the overall estimated effectiveness of seasonal influenza vaccines is currently 45%.
Pfizer expects to produce up to 50 million vaccine doses globally in 2020 and then up to 1.3 billion doses in 2021.
This has sparked hopes that global travel markets could rebound much quicker than many had expected, which would be great news for Webjet.
Although it has cut its costs materially this year to combat the sizeable decline in ticket volumes, it is still burning through its cash reserves.
The sooner the recovery takes place, the less damage is done to its balance sheet and the stronger the company will be when trading conditions return to normal.
Buoyant travel sector.
Webjet wasn't the only travel share zooming higher last week. Flight Centre Travel Group Ltd (ASX: FLT) and Sydney Airport Holdings Pty Ltd (ASX: SYD) were also strong performers.
The Sydney Airport share price jumped 13.3% and the Flight Centre share price stormed 11.8% higher.
