Qantas (ASX:QAN) share price falls amid rollercoaster day for ASX travel shares

ASX travel shares started the session strongly before fading out in early afternoon trading.

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a man stands with travel documents in hand with a roller wheel suitcase and extended handle next to him holding his forefinger to his lip as he ponders his next move in a deserted airport. as the Qantas share price falls

Image source: Getty Images

Key points

  • The Qantas share price leapt 3.2% in early trading today before falling back
  • The company is fronting a Fair Work Commission hearing regarding cabin crew pay today
  • CEO Alan Joyce says the WA border closure is creating angst for the company

The Qantas Airways Limited (ASX: QAN) share price has fallen into the red after starting the day well with a 3.2% gain in early morning trade. The shares are currently swapping hands for $4.63, down 0.64% on yesterday’s closing price.

ASX travel shares are enduring a rollercoaster ride today, with other travel companies following the same pattern.

The Flight Centre Travel Group Ltd (ASX: FLT) share price is currently down 0.06% to $15.91, having also leapt in early trading by as much as 4% before falling back.

The Webjet Limited (ASX: WEB) share price is currently $4.78, up 0.53%. However, earlier this morning it was up by 4.4% and hit an intraday high of $4.97.

Let’s take a look at the latest news from Qantas.

What’s happening with Qantas?

The Qantas share price has been on a downward trend in January, falling by 10% year to date.

On Australia Day, lobby group Australian Tourism urged the Federal Government to reopen our international border immediately.

As reported in The Financial Review, Australian Chamber-Tourism chief executive John Hart said:

As a matter of priority, the federal government must expedite the reopening of our international borders to all fully vaccinated travellers, a move that will provide the tourism industry with confidence to resume their operation.

Qantas is dealing with a Fair Work Commission hearing today regarding cabin crew pay. The Australian reported that the commission will hear the company’s application to put flight attendants on a new work agreement. The new agreement includes a 2-year pay freeze and more flexible rostering.

Yesterday, my Foolish colleague Tony reported that Ord Minnett senior investment advisor Anthony Paterno is optimistic about Qantas.

Paterno said: “We remain positive about a domestic leisure-led recovery, a prevailing rational domestic market, and strong loyalty earnings.”

What does the Qantas CEO have to say?

WA Premier Mark McGowan recently announced he would be holding off on a planned reopening of the state’s border on 5 February.

On Tuesday, Qantas CEO Alan Joyce appeared on 6PR radio in Perth saying the WA state border closure is creating angst for the company.

Joyce said:

We are faced with not knowing when the borders will open up again. So what do we do and how do we plan for that?

This uncertainty is creating for us a lot of angst about what do we plan going forward without having a certain date. Even if we get that commitment, could something change again?

Among the flight routes facing uncertainty is a Perth to London service earmarked to commence in April. A Perth to Rome flight is also due to commence in June.

Joyce continued:

I think every business has to plan a back up when you don’t have the certainty of a date. Probably in the next days, or in the next week or so, we will have to make a call on the Perth to London (flight route) for April.

As my Foolish colleague Aaron reported recently, Qantas has reviewed its capacity settings in response to the border opening delay. Capacity will be cut by 10% from 5 February to 31 March.

Share price snapshot

The Qantas share price is flat over the past 12 months. Over the past 5 days of trading, it has shed 8.6%.

For perspective, the S&P/ASX 200 Index (ASX: XJO) is down 6.5% over the past week.

Qantas has a market capitalisation of about $8.8 billion based on its current share price.

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The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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