The Webjet Limited (ASX: WEB) share price is continuing its decline from Friday’s slump. This comes as the current COVID-19 situation escalated further, with Australia’s two most populous states recording new local cases.
At the time of writing, the online travel agent’s shares are down 3.88% to $4.95. This means that the company’s share price has lost almost 5% in the past week.
COVID-19 lockdowns impacting Webjet shares
Investors appear to be selling Webjet shares, as Australia’s southern states struggle with the rapid spread of COVID-19.
New South Wales recorded its biggest 1-day jump of 478 cases, beating the previous record of 466 cases on Saturday. New exposure sites have been added with the Delta strain entering into the New South Wales Central West region.
In addition, Victoria registered 22 cases overnight as the state plans to re-introduce a curfew for 2 weeks. The Andrews government is still deciding on what the roadmap will look like in an effort to eradicate the virus.
No doubt this will further weigh down the travel industry with Webjet stuck in hibernation mode.
The closed borders to more than half of Australia will be particularly worrying for investors. Webjet relies on domestic travel to generate revenue to see the business through. Before COVID-19, the Sydney to Melbourne route was considered the 3rd busiest route in the entire world.
Furthermore, quarantine-free travel to New Zealand has been suspended with no timeframe on when the travel bubble will resume. This is also likely to affect Webjet’s revenue stream as fewer people will be travelling internationally.
The company is scheduled to report its FY21 financial results on 18 August 2021.
Webjet share price snapshot
In the last 12 months, Webjet shares have gained more than 40% since hitting near COVID-19 lows in August 2020. The company has gradually been moving on an upward trend but is still a long way off from pre-pandemic levels.
Webjet presides a market capitalisation of around $1.88 billion, making it just outside the S&P/ASX 200 Index (ASX: XJO). The company is momentarily two places out of the ASX 200 index.