The S&P/ASX 200 Index (ASX: XJO) just keeps getting better and better as it stands so far this Thursday. At the time of writing, the ASX 200 has gained a healthy 0.8% and is touching around 6,865 points. But the same can't be said for the Qantas Airways Limited (ASX: QAN) share price.
Qantas shares are presently in the green, if only just. The airline is currently up by 0.17% at $5.87 a share.
But the Qantas share price has been extremely volatile all day so far. It opened at $5.84 after closing at $5.86 a share yesterday. But over the morning, Qantas rose as high as $5.90 and dropped as low as $5.83.
So what might be going on here to spark such indecisiveness from investors?
Why are Qantas and ASX travel shares bouncing around today?
Well, this indecisiveness and volatility don't seem to be confined to just Qantas. Most ASX travel shares are displaying similar behaviour during today's session. We've seen some bouncing around from Flight Centre Travel Group Ltd (ASX: FLT) shares. As well as Webjet Ltd (ASX: WEB) and Corporate Travel Management Ltd (ASX: CTD). All have had stints in both positive and negative territory today thus far.
One possible reason for this volatility is an update put out from Corporate Travel Management this morning – a trading update.
This update contained both positive and negative outlooks for Corporate Travel, and by extension, the travel sector. The company reiterated that its starting point for FY2023 is earnings before interest, tax, depreciation and amortisation (EBITDA) of $143 million – the run rate for the fourth quarter of FY2022.
This rises to a projection of $26 5million in underlying EBITDA for FY2024, provided China opens its borders by June 2023. The company is targeting around 80% revenue recovery in FY2023.
However, Corporate Travel Management also noted that FY2023 was "expected to remain choppy".
The company pointed to supply constraints and airport congestion lingering, particularly in the US. It also noted that greater China remains "largely closed" and that COVID "remains endemic". Although Corporate Travel is optimistic that it at least will be able to ride over these issues over the coming year or so, the fact means that there are still a lot of uncertainties at play.
These issues extend to the entire ASX travel sector and could explain the volatility we are seeing in the Corporate Travel share price today. As well as the Qantas share price and other ASX travel shares.
