ASX-listed travel shares are tumbling lower today after the federal government dropped Australia’s COVID-19 vaccine targets as further uncertainty permeates.
The recent developments cast further doubt on the timeline for full travel resumption. In reaction to the uncertainty, travel shares are losing ground in today’s trading session.
Latest COVID-19 development
It seems the turmoil experienced in rolling out Australia’s national COVID-19 vaccine program has taken its toll on the federal government. Issues with acquiring supply from overseas, along with heightened concerns regarding AstraZeneca’s ties to rare blood-clotting cases, have impeded the government in reaching their earlier set vaccination targets.
The latest advice from Australian medical experts now means that an alternative vaccine to AZ is recommended for people under the age of 50 years old. As the risk of blood clotting appears to be higher in younger adults.
Pfizer is now the preferred vaccine for the younger demographic, although the choice between the two remains.
Given that Australia had planned to have the far majority (50 million doses) of its vaccine rollout be locally produced by CSL Limited (ASX: CSL), the government will now have to readjust its plans.
Scott Morrison has abandoned all targets for Australia’s COVID-19 vaccine rollout, after new medical advice disrupted the program.
But even before the latest AstraZeneca setback, the Government had missed every goal it had set itself.
What do you make of the news? pic.twitter.com/KlB3CgPyHk
— News Breakfast (@BreakfastNews) April 11, 2021
Previously, the government had planned for its entire 20 million adult population to be vaccinated by October.
After a slow start to jab distributions, this was revised to all adults receiving their first dose by October. But now, all bets are off for any target due to the latest rollout disruption.
Impact on ASX travel shares
The abandonment of all COVID-19 vaccine targets has resulted in the weakening of travel shares today.
- Qantas Airways Limited (ASX: QAN) down 2.5%
- Flight Centre Travel Group Ltd (ASX: FLT) down 0.9%
- Webjet Limited (ASX: WEB) down 1.8%
Shareholders are now looking shaky on future travel prospects. This is despite the New Zealand government announcing a ‘travel bubble‘ between Australia and the Kiwi country last week.
The likelihood of airlines, booking platforms, and cruise liners reaching pre-pandemic highs by the end of the year now seems farfetched.
The continued stumbling blocks could be making for another summer of missed opportunities and capital depletion. Something that Webjet might be ahead of the curve on – as the online travel platform completes an eyebrow-raising $250 million note offering.
The general concern circulated in the sector is, if national vaccine rollouts continue to be subdued in pace, ASX travel shares might be forced to raise further funds. That means more shareholder dilution.
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Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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