The Flight Centre Travel Group Ltd (ASX: FLT) share price slumped lower today. That's despite Prime Minister Scott Morrison suggesting on Friday the government is working to ease current COVID-19 border restrictions.
By today's market close, shares in the travel agency were trading at $18.19 – down 1.25%. Similarly, the Qantas Airways Limited (ASX: QAN) share price fell 2.39% to $5.32. However, the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price gained 1.15% to close the day at $6.17. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) dipped by 0.38%.
Let's take a closer look at the PM's statement.
Government looking into easing border restrictions
On Friday, as the Prime Minister announced the government had secured an extra 20 million doses of the Pfizer vaccine (in response to the ATAGI recommendation those under 50 not be given the AstraZeneca jab) he slipped in a clue on the border reopening. He said:
What we're asking the medical expert panel to tell us is, what are the thresholds that we need to be able to meet to do things such as the following: Australians who are vaccinated being able to travel overseas and return to Australia and not go into hotel quarantine, potentially go into home quarantine, or not even into home quarantine at all.
That statement is the first since the start of the pandemic in which the government has hinted at reopening the borders (besides with New Zealand).
Mr Morrison also said other travel bubbles, like the trans-Tasman one, could be a possibility in the near future. He said:
…[Potentially] down the track, travel from low-risk countries with similar vaccine arrangements [could be a possibility].
Now we already have the New Zealand open arrangement. We welcome that and we look forward to the success of that in the coming months. That will give us a greater deal of confidence about when we can move to other countries. I've mentioned Singapore before as an obvious next choice, but at this stage that is still some time away.
What does the mean for the Flight Centre share price though?
What about the Flight Centre share price?
The Prime Minister's statement is contingent on travellers being vaccinated, and Australia currently lags most of the world when it comes to coronavirus inoculations. This may be one reason the Flight Centre share price is falling despite the recent news.
Mr Morrison also stressed the borders would not open too soon.
"[No] one is saying that any of those things are coming in today," Mr Morrison said at the press conference.
When asked whether the easing of border restrictions would include business and leisure, the PM was more ambivalent:
On the broader question, on whether it can mean being able to go overseas, whether to Fiji or for a holiday or something like that, or to go on urgent business, or to visit a very ill loved one overseas, or important business activity, I mean, we're vaccinating people currently who had to go up to Papua New Guinea to be part of the health teams working up there. So there are a range, rightly of circumstances where this may be useful.
All we have done today, I want to stress, is ask the medical advisors what are the health implications of these types of options, and what are the preconditions that we would need to be comfortable about before going down that path.
…[The] more Australians who are vaccinated, the more likelihood there is of being able to have the types of arrangements that I've mentioned. If the vaccination population is lower, then that of course limits the options of borders.
