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Why is the Flight Centre share price in the red today?

Travel chaos continues to impact airlines locally and internationally.

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Monica O'Shea
Monica is a journalist with experience working for Daily Mail Australia in Sydney and the Port Pirie Recorder and the Flinders News in South Australia. Monica completed a journalism cadetship in 2013. She also hold a B.Science (Biotechnology) with Honours from the University of Adelaide. Monica has worked in government at the local, state and federal level. Monica has a keen interest in finance and the share market and enjoys exploring the highs and lows. When not writing for Motley Fool Australia, Monica enjoys travel, sport, music, and likes to play the violin in her spare time.
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Key points
  • The Flight Centre share price is in the red today 
  • Qantas and Webjet shares are also down 
  • Travel chaos in the US is continuing and multiple countries are introducing COVID-19 testing for travellers from China

The Flight Centre Travel Group Ltd (ASX: FLT) share price is in the red today.

Flight Centre shares are sliding 2.74% and are currently fetching $14.21. For perspective, the S&P/ASX 200 Index (ASX: XJO) is down 1.07% at the time of writing.

Let's take a look at what might be weighing on the Flight Centre share price.

A young girl cries at an airport with planes lining up in the background.

Image source: Getty Images

Travel chaos continues

Flight Centre is not the only ASX 200 travel share struggling today. The Qantas Airways Limited (ASX: QAN) share price is down 2.47%, while Webjet Limited (ASX: WEB) shares are falling 1.84%.

Australian airline shares are following in the footsteps of United States travel shares. United Airlines Holdings Inc (NASDAQ: UAL) shares dropped 2.38%, while Delta Air Lines Inc (NYSE: DAL) shares fell 2.77% and Southwest Airlines Co (NYSE: LUV) tumbled 5.16%.

There was flight cancellation chaos amid blizzards and winter storms. Southwest Airlines cancelled nearly 10,000 flights across the country in three days, Business Traveler USA reported.

Flight Centre has operations and offices globally, including in the United States.

The USA also announced overnight they will require negative COVID tests for travellers from China, including Hong Kong and Macau, The New York Times reported. Japan and Italy have also announced similar measures.

A decision on introducing a similar measure in Australia for travellers from China has yet to be made. Health Minister Mark Butler, in quotes cited by news.com.au, said:

The Australian government continues to monitor the global situation. Travel arrangements for Australians and visitors to the country remain unchanged.

Flight Centre is predicting continued momentum company-wide in FY23. In November, the company reported its cost margin is improving and tracking at 10% in the year to date. This is in line with the company's pre-COVID transformation target. The company is predicting more rapid improvement during the second half of the financial year.

Share price snapshot

The Flight Centre share price has descended 20.35% in the last year.

For perspective, the ASX 200 has shed 6.65% in the last year.

Motley Fool contributor Monica O'Shea has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Delta Air Lines and Southwest Airlines. The Motley Fool Australia has recommended Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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