The Qantas Airways Limited (ASX:QAN) share price is under pressure today after being forced to push back its international travel plans…
The post Here’s why the Qantas (ASX:QAN) share price is sinking today appeared first on The Motley Fool Australia. –
The Qantas Airways Limited (ASX: QAN) share price is under pressure on Wednesday.
In afternoon trade, the airline operator’s shares are down 3.5% to $4.49.
Why is the Qantas share price hitting turbulence?
The catalyst for the weakness in the Qantas share price today appears to be the Federal Budget.
Last night the Federal Government revised its anticipated timeline for the completion of Australia’s vaccine rollout to the end of 2021. It also pushed back its timeline for significantly reopening international borders until mid-2022.
This was a blow for Qantas, which was aiming to resume its international services from October. In fact, so confident was the airline that this would come to pass, it has been taking bookings for travel from this period onwards.
Qantas pushes back plans
In response to the news, this morning the airline announced that it would be pushing back its international service plans from the end of October 2021 to late December 2021. Though, it stresses that this has no bearing on Trans-Tasman flights.
Qantas advised that it remains optimistic that additional bubbles will open once Australia’s vaccine rollout is complete to countries that are in a similar position. However, it has warned that it’s difficult to predict which ones at this stage.
Nevertheless, Qantas is ready to take advantage of pockets of tourism and trade opportunities as they emerge in a post-COVID world. It intends to keep reviewing its plans as it moves towards December and circumstances evolve.
In the meantime, the company will continue to provide critical repatriation and freight flights overseas. It will also support the recovery of travel at home, which management notes remains the most important element of the company’s recovery.
For now, the company intends to reach out directly to any customers with a booking between 31 October 2021 and 19 December 2021. Fortunately, recent levels of uncertainty meant international booking levels were relatively low.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.