Webjet shares dropping lower. What’s going on?
The post Here’s why the Webjet (ASX:WEB) share price is getting hammered on Friday appeared first on The Motley Fool Australia. –
The Webjet Limited (ASX: WEB) share price is dropping again. It is currently down by another 5% at the time of writing.
But this adds to declines that the business has seen over the last couple of weeks. Since Monday 8 November 2021, it has fallen by 19%.
But Webjet isn’t the only one suffering today. Other S&P/ASX 200 Index (ASX: XJO) shares are also in the red. The Corporate Travel Management Ltd (ASX: CTD) share price is down 5%, the Flight Centre Travel Group Ltd (ASX: FLT) share price is down 7.5% and the Qantas Airways Limited (ASX: QAN) share price is down 5.3%.
What’s going on with the Webjet share price
Sometimes investors are willing sell first and ask questions later when it comes to potential problems.
COVID-19 has been impacting the travel industry for almost two years now.
But whilst it seemed like everything was settling down, there are reports of a new COVID-19 variant that could be about to put a spanner in the works for the Webjet share price, and potentially many others.
According to reporting by various media, such as News.com.au, there is variant that prove to be even more troubling than the Delta strain.
The BBC reports that scientists say the variant has 50 mutations overall and more than 30 on the spike protein, which is the target of most vaccines and the “key the virus uses to unlock the doorway into our body’s cells”.
It’s reported that experts in South Africa have said the variant is “very different” to others that have circulated, with concerns that it could be more transmissible but also able to get around parts of the immune system.
Prof Ravi Gupta, from the University of Cambridge, said the new variant had the potential to escape immunity and have increased infectivity.
The BBC reported Prof Neil Ferguson, from the Imperial College London, has said it’s concerning the new variant appeared to be “driving a rapid increase in case numbers in South Africa” and said the move to restrict travel was “prudent”.
UK restricts travel
The UK has decided to act quickly to stop this variant getting into the country. People coming from several southern African countries – South Africa, Namibia, Zimbabwe, Botswana, Lesotho and Eswatini – will have to quarantine. All flights from those countries have been suspended.
Any British or Irish resident arriving from the countries will have to quarantine in a hotel from Sunday morning.
The BBC reported the flight ban will remain in place until the hotel quarantine system is up and running.
A big question for the Webjet share price, the ASX 200 travel share sector and the wider world will be what happens next if this new variant escapes southern Africa? Will there be more travel bans and quarantining?
UK Health Secretary Sajid Javid said these actions were about “being cautious and taking action and trying to protect. as best we can, our borders”.
What is the Australian response?
The World Health Organization’s technical working group is going to meet on Friday to discuss this new variant.
However, at this stage, Australia is not going to make any changes. The Guardian and many other media outlets reported that the Australian health minister, Greg Hunt, has told media there will be no changes to flights from South Africa.
But the Australian government will remain flexible and could make changes if needed. But passengers from South Africa are currently going through 14-day quarantine anyway.
Webjet share price snapshot
Despite the fact that Webjet shares are down so much over the last month, it is still up 7% in the last six months and 4% in 2021 to date.
The post Here’s why the Webjet (ASX:WEB) share price is getting hammered on Friday appeared first on The Motley Fool Australia.
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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 Corporate Travel Management Limited, Flight Centre Travel Group Limited, and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.