It has been a difficult start to the week for the shares of Flight Centre Travel Group Ltd (ASX: FLT), Qantas Airways Limited (ASX: QAN), and Webjet Limited (ASX: WEB).
At the time of writing, all three travel companies are in the red and underperforming the S&P/ASX 200 Index (ASX: XJO).
What's happening?
Here's the current state of play in the sector today:
- The Flight Centre share price is down 2% to $18.14.
- The Qantas share price has fallen 0.7% to $5.08.
- The Webjet share price is 2% lower at $5.61.
Why are travel shares under pressure?
There appear to be a couple of catalysts for today's weakness in the travel sector.
The first is news that Greater Brisbane will go into a snap three-day lockdown from 5pm AEST today. This is in response to 10 new cases of COVID-19, four of which are from community transmission.
According to the ABC, Queensland Premier Annastacia Palaszczuk revealed that two of the community transmission cases have an unknown origin.
As things stand, other states have yet to respond to the Queensland Government's update, but there are concerns that travel to Brisbane could be off the cards during the key Easter holiday period.
What else is weighing on travel stocks?
In addition to this, rising cases of COVID-19 across the world appear to have spooked investors.
Although vaccines are being rolled out across Europe and North America, it hasn't been enough to slow the spread of the virus.
This has led to lockdowns being put in place in some countries to fight a third wave.
And with the Northern Hemisphere's holiday period on the horizon, there are fears that the travel market rebound could be pushed back into 2022.
The good news for the likes of Flight Centre, Qantas, and Webjet, though, is that they have sufficient liquidity to ride out the storm well into next year.
