Insights

Should the JobKeeper payment be replaced with discounted airfares?

The JobKeeper payment is ending and the new stimulus package that includes discount airfare access is on the way. Will it work?
The post Should the JobKeeper payment be replaced with discounted airfares? appeared first on The Motley Fool Australia. –

Question mark made up of banknotes in front of blue background

As the JobKeeper payment wraps up, the Flight Centre Travel Group Ltd (ASX: FLT), Webjet Limited (ASX: WEB) and Qantas Airways Limited (ASX: QAN) share price are all having a party this afternoon. Especially the Flight Centre share price, which is presently up 10%.

The JobKeeper payment is coming to a close and the new package to replace it is a hot topic today. Particularly because it includes 800,000 half-priced airfares within the $1.2 billion stimulus package.

So why exactly are travel and tourism stocks rallying while the government prepares to reel in the JobKeeper payment? And what does the package look like next to US President Joe Biden’s latest stimulus?

How will half-price airfares help the economy?

Commenting on the subsidised ticket scheme, Prime Minister Scott Morrison said that the new program “…means more jobs and investment for the tourism and aviation sectors as Australia heads towards winning our fight against Covid-19 and the restrictions that have hurt so many businesses.”

Investors were happy to hear about the upcoming cash injection to the tourism industry. The Qantas share price is up 2.13% to hit $5.28 a share and the Webjet share price has flown by 4.44% to touch $6.12 at the time of writing.

In addition to the market support we’re seeing, the government is betting that the discounted ride will also get consumers out to spend money.

Prime Minister Morrison concluded: “Our tourism businesses don’t want to rely on government support ­forever… they want their tourists back.” 

Do airline tickets or cash lead to quicker spending?

Meanwhile, the US is rolling out a $1.9 trillion relief bill, which essentially puts US$1,400 in the pocket of many Americans. 

A lesson already learned in Australia is that COVID-19 stimulus checks led to a gambling surge, a similar pattern we witnessed during the 2009 stimulus package.

The National Library of Medicine performed research around that stimulus and revealed that the issued cash allowances resulted in a 26% increase in electronic gaming machine (EGM) revenues. Over $60 million in additional tax revenue for state governments was also accrued. 

It seems likely that the federal government kept this in mind when considering how to package up this round of benefits. The question is, will people take advantage of the offering? Or is it just business that is catching a break?

Foolish takeaway

While some investors are likely enjoying the rally we’re seeing with tourism stocks today, such as the Flight Centre share price gaining more than $1 a share, we’re looking at a much bigger picture.

The JobKeeper payment was an economic staple for a decent amount of time and the new stimulus package has big shoes to fill. We’ll have to wait and see if half-price airfares will be up for the challenge. 

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Gretchen Kennedy owns shares of Flight Centre Travel Group Limited and Qantas Airways Limited. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. 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.

The post Should the JobKeeper payment be replaced with discounted airfares? appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!