ASX Travel Focuses on Global Flight Cancellations

Image source: Getty Images

ASX travel shares will be the focus when the ASX stock market reopens, with global travel once again affected by COVID-19.

According to reports from the BBC, more than 8,000 flights in total were grounded according to the tracking of FlightAware data.

Different countries see varying levels of impact, but countries like China and Hong Kong experience the worst cancellations.

What causes flight cancellations?

COVID-19 is the main culprit, however, it seems more particularly to be the Omicron variant which is spreading quickly.

A major challenge is that large numbers of flight crews and people leading operations have to self-isolate after coming into contact with infected people. This cripples the ability of airlines to operate all flights.

Further delays are linked to severe weather phenomena in the northern hemisphere.

Not only are flights delayed, but individuals are affected as well. In many parts of the world, a negative COVID-19 test is required before you can travel.

ASX travel parts that could be impacted

With the speed with which the Omicron variant is spreading around the world – both Australia and other countries – the ASX travel share industry could be at least somewhat impacted on almost all markets.

Some of the ASX travel actions that can be highlighted include Corporate Travel Management Ltd (ASX: CTD), Limited webjet (ASX: WEB), Flight Center Travel Group Ltd (ASX: FLT), Qantas Airways Limited (ASX: QAN) and Helloworld Travel Ltd (ASX: HLO).

However, as COVID-19 continues to impact businesses, there is a longer-term recovery.

Webjet and Corporate Travel said they began to profit from some operating divisions in the second half of calendar year 2021 as more volume came in and vaccinations opened up travel lanes.

Do analysts still like ASX travel stocks?

Each business is in a different situation, but there are many buying reviews for certain businesses.

For example, UBS and Citi both rate Corporate Travel as a purchase with price targets more than 20% above the current Corporate Travel share price.

Morgans and UBS both rate the Webjet share price as a buy with price targets at least 25% higher than the current Webjet share price.

UBS and Morgan Stanley both rate Qantas shares as a buy. UBS has a price target of $ 6.20 on the airline. Morgan Stanley’s price target is 40% higher than the current Qantas share price.

Comments are closed.