Why the Qantas (ASX:QAN) share price is flying 4% higher today

ASX 200 travel shares are eager to see more international borders reopen.
The post Why the Qantas (ASX:QAN) share price is flying 4% higher today appeared first on The Motley Fool Australia. –

The Qantas Airways Ltd (ASX: QAN) share price is flying higher today. Shares in the airline are up 4.09% to $5.85 per share at the time of writing.

And Qantas isn’t the only S&P/ASX 200 Index (ASX: XJO) travel share to be lifting off today.

The Webjet Ltd (ASX: WEB) share price is up 2.5% at this same time. And the Flight Centre Travel Group Ltd (ASX: FLT) share price is charging 4.8% higher.

This as the broader ASX 200 is struggling today, down 0.15%.

So, what’s helping lift the Qantas share price?

The world’s biggest economy throws open its doors

The United States, the world’s biggest economy, has just thrown open its doors to international travellers.

Well, sort of.

The US has announced that it will again allow entry to travellers from more than 30 nations. Aside from the European countries, those include India, China, Brazil and Australia.

That news looks to be driving interest in ASX 200 travel shares today, and providing welcome tailwinds for the Qantas share price.

But some caution remains in order.

As mentioned, the doors to international arrivals into the US have only “sort of” been fully reopened.

Though there may be select individual exemptions, only fully vaccinated travellers will be allowed to fly into the US. And surging COVID-19 cases across much of Europe in recent weeks has some market watchers worried new rounds of lockdown restrictions may be in the pipeline.

Then there’s the depressed demand from business travellers.

The pandemic saw most corporations turn to work from home settings, widely adopting video conferencing over any kind of face-to-face meetings. That drastic change in business modelling may well prove sticky, even as travel restrictions are lifted, as it costs a lot less to Zoom with US clients or colleagues than it does to fly your executive team across the world.

According to John Strickland at JLS Consulting in London (quoted by Bloomberg):

There’s definitely going to be pressure on ticket prices as airlines go after the same travellers. We’ve seen a surge in demand from people looking to visit friends and family, but although demand for premium leisure is encouraging, it will not likely be enough to offset the lack of business travel.

If Strickland’s right and ticket prices remain under pressure, that could in turn see the Qantas share price pressured as well.

Qantas share price snapshot

The Qantas share price has gained 19% so far in 2021. That compares to a year-to-date gain of 11% posted by the ASX 200.

Over the past month Qantas shares are up 5%.

The post Why the Qantas (ASX:QAN) share price is flying 4% higher today appeared first on The Motley Fool Australia.

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More reading

Flight Centre (ASX:FLT) share price leaps 5% as US borders to reopen

Why is the Webjet (ASX:WEB) share price underperforming Corporate Travel lately?

The Qantas (ASX:QAN) share price is lifting, but returning planes to the air isn’t without challenges

Own Flight Centre shares? Here’s the company’s plan to reopen WA

Travel is resuming but the Flight Centre (ASX: FLT) share price still lost 7% in October

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.

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