Victoria looks set to follow the country's largest state into lockdown, which will deliver a big blow to the economy and travel-related ASX 200 shares.
The Corporate Travel Management Ltd (ASX: CTD) share price slumped 3.5%, Webjet Limited (ASX: WEB) share price dived 2% and Flight Centre Travel Group Ltd (ASX: FLT) descended 1.5% at the time of writing.
In contrast, the S&P/ASX 200 Index (Index:^AXJO) dipped 0.3% in the red as news of the potential lockdown broke.
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ASX 200 travel shares hit by new lockdown
Victorian Premier Daniel Andrews is expected to announce that the snap lockdown will start from midnight tonight, reported the Australian Broadcasting Corporation.
The drastic move comes as the state recorded two cases of COVID-19 infections that were transmitted at the AFL game at the MCG on Saturday.
A COVID-positive case linked to the NSW removalists at the Ariele apartment attended the match and is believed to be the source of the infection. The 60-year-old man was asymptomatic but carries the highly transmittable Delta variant.
Uncertainty clouds ASX 200 travel shares
The ABC reported that one of the two new cases sat close to the man at the MCG, while the other was further away but in the same section.
It's not known how long the Victorian lockdown will last as authorities are said to be still in discussions.
Victoria takes the unenviable title of being the most locked-down and restrictive state in Australia as this snap lockdown will be its fifth.
Victoria adds to Sydney-induced economic contraction
These are nervous times for shareholders of ASX 200 travel shares. These shares have been whipped sawed as states move in and out of lockdowns to contain the virus.
As it stands, the lockdown in Sydney that started three weeks ago will likely cause Australia's GDP to contract in the third quarter, reported Reuters.
This was before the news of the likely Victorian lockdown broke. If our economy was to shrink as forecast, it would be the first time it contracted since the June 2020 quarter.
ASX travel shares heading for more turbulence
ASX 200 travel related shares will take the brunt of the lockdowns as borders slam shut to Aussies living in the two biggest states in the country.
Interestingly, the Qantas Airways Limited (ASX: QAN) share price is just able to keep its head above breakeven today. But it's down by around 17% from last November's peak.
The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price is another holding up better than most today. A takeover battle to seize control of our largest airport is helping.
This makes me wonder if any sell-off in ASX 200 travel shares are a buying opportunity. Activity tends to rebound sharply once the lockdown is lifted and M&A interest provides a second safety net.
