The S&P/ASX 200 Index (ASX: XJO) is following the lead of US markets and heading higher. At the time of writing, the index is up 0.6%. ASX 200 travel shares are up much more.
The Qantas Airways Limited (ASX: QAN) share price is up 4.2%; the Webjet Limited (ASX: WEB) share price is up 3.9%; and shares in Flight Centre Travel Group Ltd (ASX: FLT) have gained 5% since this morning’s opening bell.
What’s happening with the travel industry?
ASX 200 travel shares have proven particularly vulnerable to any fresh news relating to COVID-19 for obvious reasons. When international and domestic borders are closed to contain the virus, their business evaporates.
For that reason, shares such as Qantas, Webjet and Flight Centre took some of the hardest hits when the coronavirus went global in February and March 2020. These same shares then posted some of the biggest gains on the early vaccine announcement in November last year.
And this pattern has continued to play out since.
Positive news on the virus front tends to see ASX 200 travel shares rally, while negative news tends to see them fall harder than the broader index.
When news of the Omicron COVID variant broke, all major global share markets sold off. And travel shares were again the biggest losers.
Now the first glimmer of hope is arising that Omicron may not be the viral Bogeyman the world first feared.
Anthony Fauci, director of the US National Institute of Allergy and Infectious Diseases, is one of the most influential people on the planet when it comes to the ongoing pandemic. And over the weekend, Fauci told CNN: “Thus far it does not look like there’s a great degree of severity to it, but we’ve really got to be careful before we make any determinations that it is less severe or doesn’t really cause any severe illness.”
Despite his added note of caution, the Nasdaq closed up 0.9% yesterday (overnight Aussie time), buoyed by travel shares such as United Airlines Holdings Inc (NASDAQ: UAL). United closed up 8.3% yesterday.
Today, we’re seeing a similar pattern playing out on the ASX 200 with travel shares leading the charge.
How have these ASX travel shares performed in 2021?
All 3 of the ASX 200 travel shares listed above are in the green in 2021.
The Qantas share price has gained 5.3%, Webjet shares are up 7.8%, and the Flight Centre share price is up 13.4%.