The Webjet Limited (ASX: WEB) share price has been flying high recently.
Over the last month, shares in the online travel agency have rocketed 9.41% and are currently sitting at $6.51 as of the time of writing. Compared to the S&P/ASX 200 Index (ASX: XJO), which is only up 1.92% in the same period, it is an impressive feat.
Yet, the company is still not near its pre-COVID levels. On the first trading of 2020, Webjet shares ended the day at $9.49 – 45.8% higher than its current price.
Let's take a closer look.
Webjet shares are high, but not as high as they once were
First, let's take a look at what might have contributed to the rising Webjet share price over the last month.
When it comes to ASX travel shares, Webjet isn't alone. Qantas Airways Limited's (ASX: QAN) value has increased 4.18% over the month, Flight Centre Travel Group Ltd (ASX: FLT) shares are 16.2% higher, and the Helloworld Travel Ltd (ASX: HLO) share price is up an incredible 31.8% in that time.
ASX travel shares have been buoyed by recent developments about the pandemic. NSW Premier Dominic Perrottet announced he is ending all quarantine requirements for international travel come 1 November. This was swiftly followed by the Prime Minister, Scott Morrison, saying Australians would be able to leave and return to the country at will on the same date – effectively ending Australia's closed international border.
Queensland, Victoria, and the ACT have all announced they would be effectively ending their closed border stances for fully vaccinated travellers as well.
Australia's high vaccine uptake has moved forward the country's plans for re-opening faster than most anticipated. It's clearly been good news for the Webjet share price, and other ASX travel shares.
So, why isn't the Webjet share price at pre-COVID levels yet?
Put simply, it's because we aren't in pre-COVID times anymore.
While Australians can come and go out of the country, this does not apply to international travellers. The Prime Minister, when he announced Australians could leave and enter the country when they wished, also made it abundantly clear that other nationals would not be extended the same privileges until sometime in the next year.
As well, only NSW and Queensland have made plans to end quarantine for international arrivals, Queensland saying they won't end quarantine until 90% of those 16+ are fully vaccinated. Western Australia, Tasmania, and South Australia haven't even indicated when they will open their domestic borders.
More generally, even with the opening of the borders, it is more onerous to travel than it once was. A person will need to test negative to the coronavirus before leaving and returning, wear masks on the plane, and prove they are fully vaccinated. Not every country has opened their border to Australia, such as Bali, for example.
This could explain why the Webjet share price isn't at its pre-pandemic levels.
Another explanation is risk. The border hasn't actually opened yet and won't open for another 11 days. The future is more uncertain now than it was before the pandemic. Investors price risk into their decision making, and the risk may be too high for many buyers.
Webjet share price snapshot
Over the past 12 months, the Webjet share price has increased 56.8%. Year-to-date, shares in the company are up 22%. Webjet has a market capitalisation of approximately $2.4 billion.
