Travel shares are sliding at the start of the week as Australian states struggle to contend with the COVID-19 resurgence. In particular, the Webjet Limited (ASX: WEB) share price is off by 1.7% today, at $4.84 apiece.
Since March, shares in the travel agent have been moving to the downside. As a result, the Webjet share price has lost 20% in approximately 4 months. The uncertainty that has been introduced by the Delta variant has suppressed investor sentiment.
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New South Wales has started the week off with 145 new locally acquired cases overnight. Unfortunately, 51 of those cases were in the community during their entire infectious period.
Additionally, NSW Premier Gladys Berejiklian is expected to announce changes to restrictions soon, with a possible tightening in some instances. This follows protests in Sydney, which the state fears could end up being a 'super spreader event'. With another protest planned for the coming weekend, NSW police commissioner Mick Fuller said:
We will be heavily policing that event. We will take the ground very early. You will be arrested. The community has spoken about that behaviour. The Premier has spoken about that behaviour and it won't be tolerated again.
Despite having been in lockdown for a month now, Sydney has continued to post high daily cases of COVID-19.
The continued lockdowns have weighed on many industries, including travel. In fact, the estimated cost to the economy per week of the NSW lockdown is $1 billion, according to the Australian Financial Review. With millions of people across the country under some form of restriction or lockdown, the impact is taking its toll on the Webjet share price.
On a positive note, South Australia expects to be let out of lockdown at 12:01am on Wednesday. However, an additional week of restrictions will be imposed to remain vigilant. Meanwhile, Victoria has delayed its verdict on a lockdown lift until tomorrow.
Webjet share price recap
Despite the recent events, the Webjet share price is up 57.1% in the last 12 months. Comparatively, the S&P/ASX 200 Index (ASX: XJO) has rallied 22.4%.
Fortunately for Webjet shareholders, the company has raised plenty of capital to sustain itself throughout this tumultuous period. At the end of March, Webjet held $262 million. In addition to this, the company also raised a further $250 million through a convertible note offering in April.
The Webjet share price has fallen roughly 8% since announcing its convertible note offering.
