Qantas is one of three potential reopening ASX share ideas.
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There are a few ASX shares that could be interesting reopening ideas to think about.
The lockdown continues in Sydney and lockdowns are rolling into other places, with the ACT being the latest region to be affected.
Plenty of businesses, large and small, are experiencing significant impacts. But they may also be ideas as reopening options once the country gets through this difficult time.
He pointed out some high-quality, large ASX shares that look good value and could benefit as borders reopen.
Mr Featherstone revealed these three ideas as ones to consider:
Qantas Airways Limited (ASX: QAN)
He noted that Qantas is suffering from the domestic borders closing as well as international borders remaining shut.
Qantas could be interesting if domestic borders are completely open by the end of FY22 and international borders start to open.
He thinks demand for Qantas air tickets will go back to full capacity once the public are confident to book travel.
The ASX share could also emerge from this period with a lower cost base, however, Mr Featherstone acknowledged that Qantas isn’t a screaming buy.
Star Entertainment Group Ltd (ASX: SGR)
The casino operator was another stock idea. With The Star in Sydney in lockdown, the business is being heavily impacted. Since the start of June 2021 the Star share price has fallen 17%.
Mr Featherstone acknowledged the potential threat from a second Sydney casino.
However, the fact that overseas casinos are doing better than expected after the end of restrictions could be a good sign for later in the year.
In his opinion, Mr Featherstone believes that The Star is well positioned for the rebound because its main asset is locked down in Sydney. Over the longer-term, the development in Brisbane could also be a good addition.
Flight Centre Travel Group Ltd (ASX: FLT)
Flight Centre is the third ASX share that was picked as a reopening idea.
It was noted that Flight Centre is facing more than one difficulty. There’s the COVID-19 impacts on travel bookings, but there is also the long-term change of bookings from bricks and mortar places to online booking.
The detractors of Flight Centre, Mr Featherstone points out, say that travel agent commissions are under pressure as people go directly suppliers (like Qantas), and the business also has large rent and wage costs.
However, a positive factor for the ASX share is that Flight Centre generates around half of its total transaction value (TTV) outside of Australia and New Zealand, where vaccination rates are higher and likely to get back to normal quicker.
Another factor is that Flight Centre sees a pleasing amount of TTV come from corporate travel, which is less affected by COVID-19 too.
Whilst he acknowledged that it could take years for full demand to return, Mr Featherstone believes that picking Flight Centre whilst it’s down could be an opportunistic strategy.
Should you invest $1,000 in Qantas right now?
Before you consider Qantas, you’ll want to hear this.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. 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 recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.