Big-name ASX travel shares have endured a harsh start to the new trading week. This comes following broadening news of State Government restrictions and border shutdowns amid increasing COVID-19 infections.
By Monday’s close of trade, Qantas Airways Limited (ASX: QAN) shares were down 4.02%, the Webjet Limited (ASX: WEB) share price had sunk 4.74% lower, and Flight Centre Travel Group Ltd (ASX: FLT) shares had fallen by 3.45%. By comparison, the S&P/ASX 200 Index (ASX: XJO) only finished the day down by 0.01%.
While there are many factors that influence the movement of a company’s share price, the raft of public health restrictions coming into force across the country are likely contributing to these sector-wide falls.
Australia’s COVID uptick
Australia’s largest city, Sydney, and its surrounding areas were placed into a 2-week lockdown over the weekend after New South Wales reported 59 new cases across the two days. Many other states had already shut their borders to the harbour city.
Since then, local cases have been reported in Victoria, Queensland, Western Australia, and the Northern Territory. New Zealand responded by shutting down its travel bubble with the whole of Australia for the time being. South Australia has closed its border to everywhere bar Victoria and Tasmania.
Every state and territory has either introduced new restrictions or, at the very least, maintained existing restrictions. These range from social distancing and mandatory wearing of masks to full lockdowns.
With the rise in new cases coinciding with the beginning of the school holidays, many family vacations have been thrown into disarray. This may be spooking some investors and could be contributing to the falls in ASX travel shares today.
In March 2020, when the initial stages of the pandemic saw the market head into freefall, travel shares were hit especially hard. Many, including Qantas and Flight Centre, have not returned to their pre-coronavirus levels.
The latest rise in cases may be now unnerving investors just as it did in March last year, albeit not to the same extent. Australia’s sluggish vaccine rollout could also be negatively impacting ASX travel shares.
ASX travel shares snapshot
Over the past 12 months, the abovementioned ASX travel shares have all increased by double-digit figures. This ranges from Qantas’ approximately 19% rise to Webjet’s almost 43% increase. The share prices of all three companies, however, are still significantly lower than where they were 18 months ago when nobody had heard of COVID-19.