Here’s why the Webjet (ASX:WEB) share price is lifting 4% on Friday

Webjet shares are flying higher as NSW announces planned border changes.

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The Webjet Limited (ASX: WEB) share price is up around 4% amid the latest changes to borders and quarantine that have been announced by the New South Wales government.

What has NSW announced about borders and quarantine?

The NSW government has announced that the hotel quarantine program is going to end on 1 November 2021, according to reporting by various media, such as The Guardian.

Premier Dom Perrottet said:

From November 1st, those returning Australians and tourists who want to come back, who want to visit Australia and coming to Sydney, hotel quarantine will be a thing of the past.

We will require, working with the Commonwealth government, that people coming into here, you’ll need to do a PCR test before you board the flight, you will need to show proof of your double vaccination.

For double vaccinated people around the world, Sydney, New South Wales is open for business.

We want people back. We are leading the nation out of the pandemic. Hotel quarantine, home quarantine is a thing of the past. We are opening Sydney and NSW to the world.

There will be no home quarantine either for those double-vaccinated people who want to come to Australia.

However, there were questions raised about some of the journalists regarding what the federal government has agreed to because it’s the federal officials that control the international border.

Investors will be weighing up their thoughts on the Webjet share price ahead of this deadline.

Victoria and NSW border to open

On 20 October (or 19 October at almost midnight), fully vaccinated NSW residents will be able to travel to Victoria without quarantine.

But, those people must test negative before crossing the border, then isolate and test negative again.

So while there’s still a bit of a process, there won’t be the 2-week quarantine rule that has been in place.

However, the unvaccinated people that want to travel from NSW to Victoria must still test negative before arriving and quarantine for two weeks.

People coming from ‘orange zones’ won’t need to get tested and isolate until they receive a negative result. But they need to hold a valid permit.

How could more travel affect the Webjet share price and profit?

Investors seem happy to send Webjet shares higher.

Webjet itself said a couple of months ago that its online travel agency (OTA) business was profitable from April to July, and Online Republic was profitable in April and May, but the lockdowns stopped that profitability. Management said they were confident both businesses would return to profitability as soon as the domestic Australian and New Zealand markets reopen. International borders opening could also help things.

Relating to WedBeds, Webjet said this business was profitable in July and August and was on track to be profitable in September. It has seen strong demand as travel restrictions ease in North America and Europe, “suggesting significant upside as more international markets reopen”.

The business has been working on reducing its costs by at least 20% for when the company can get back to scale. The ASX travel share believes it will have a higher market share, lower costs, and greater profitability.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. 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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