ASX travel shares, including Qantas Airways Limited (ASX: QAN) and Flight Centre Travel Group Ltd (ASX: FLT), have taken a serious beating from the coronavirus pandemic.
Both companies plummeted to 52-week lows on 19 March last year and have struggled to recover as travel restrictions took hold and Australia and the world went into lockdown.
Over the past 12 months, the Flight Centre share price is still down 45.5%. The Qantas share price has gained more ground, but it still has another 2.9% to go to reach where it was a year ago.
Credit Suisse plugs Qantas and Flight Centre
According to today's Australian Financial Review (AFR), Credit Suisse has positions in both Qantas and Flight Centre.
Here's what Credit Suisse Private Banking portfolio manager Mike Jenneke had to say:
These companies have very good hibernation strategies and that will see them through the present downturn. The vaccine news is positive and there's risks obviously but when it's safe to do so, it will recover.
Demand is pent up and we think we'll see a pretty significant rebound in travel. These kind of stocks will be volatile but we think there is an overall opportunity there.
Struggling to touch pre-pandemic numbers
The AFR notes that while the S&P/ASX200 Index (XJO) has regained ground, the Qantas share price is 30% lower than pre-pandemic levels. AFR estimates that the Flight Centre share price is 60% lower.
Senior portfolio manager of American Century Investments, Brent Puff, said that since the air services industry was one of the hardest hit by COVID, he sees opportunity.
Mr Puff recently added Booking Holdings Inc (NASDAQ: BKNG) to his portfolio. He believes that the Booking.com business has a far way to recover and that pent up travellers will resume their regular habits once the vaccine widely circulates.
Foolish takeaway
While ASX travel shares and the air services industry, in particular, put themselves back together in the aftermath of COVID, analysts see opportunity in the recovering companies. The expert advice to savvy investors is to keep an eye on updates on the vaccines and changes to travel restrictions.
