The Flight Centre Travel Group Ltd (ASX: FLT) share price has been soaring so far this year.
The travel agent's stock has been on a volatile path after it crashed 61% amid the onset of the COVID-19 pandemic in 2020. It recovered some in 2021, rising 11% over the year before tumbling 18% in 2022.
Now, the Flight Centre share price appears to have finally regained its footing. It's leapt 30% so far this year to close Thursday's session at $18.71.
For comparison, the S&P/ASX 200 Index (ASX: XJO) has gained 7% since the start of 2020 and 5% so far this year.
Could the Flight Centre share price keep flying from here, or is it destined to come crashing down once more? Let's take a look.
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The ASX 200 travel giant's COVID-19-induced struggles
To forecast whether the gains recorded by the Flight Centre share price in 2023 are just a blip or a long-term trend, we must delve into why the stock hit turbulence in recent years.
The company operates in the travel space. Thus, it was hit hard when international (and often state) borders slammed shut in 2020.
In an effort to stay afloat, it scrapped its dividend, closed stores, cut costs, and underwent capital and debt-raising activities. That also saw the company substantially increase its share count.
Come the end of financial year 2020, the travel giant had etched an $849 million statutory loss. Fortunately, its earnings have been generally trending upwards since.
Why has the Flight Centre share price gained 28% in 2023?
With all that in mind, Flight Centre, and its shares, have started 2023 out on the right foot.
The company was nearer to profit in the first half of financial year 2023. It posted a $20 million statutory loss for the period.
It also announced its $211 million acquisition of luxury travel business Scott Dunn in January, undergoing a $180 million placement and an oversubscribed $60 million share purchase plan to do so.
However, while investors clambered to snap up shares in the company's capital raise, short sellers appeared to remain dubious.
Flight Centre is still among the market's most shorted shares, with a short interest of 9.76% at last count. That figure has fallen 2% over the past week to sit below 10% for just the second time in 18 months.
Not to mention, while inflation looks to have peaked in Australia, it still remains above historical levels. Though, that hasn't deterred Aussies from travelling.
Foolish takeaway
All in all, the Flight Centre share price's 2023 gains appear to be warranted, in my opinion.
However, given the still-high short interest, I wouldn't be surprised if the stock remains volatile for some time to come.
