Travel investors like the look of the new four-point COVID plan…
The post Webjet (ASX:WEB) share price jumps on new four-step COVID-19 plan appeared first on The Motley Fool Australia. –
The Webjet Limited (ASX: WEB) share price is charging higher this afternoon. Shares in the booking platform provider are up 4.6% to $5.12.
Webjet is not alone though, with other travel companies also gathering optimism. At the time of writing, Flight Centre Travel Group Ltd (ASX: FLT), Corporate Travel Management Ltd (ASX: CTD), and Qantas Airways Limited (ASX: QAN) are 4.8%, 2.4%, and 3.5% higher respectively.
This follows the announcement of a new COVID-19 plan, shared at the government’s National Cabinet meeting today. Prime Minister Scott Morrison shared the plan which hopes to better manage the pandemic.
New COVID-19 plan
It appears investors are looking upon travel shares with a more optimistic lens today following the announcement of a new COVID-19 plan from the National Cabinet.
The four-phase plan will be delineated by percentages of the eligible population vaccinated. Currently, we are in the first phase of this new endeavour to return to ‘normal’. This phase is all about ‘Vaccinate, prepare, and pilot’, according to Morrison.
During this step, the government plans to temporarily reduce commercial inbound passenger international arrivals by 50% to ease pressure on quarantine facilities due to increased risks from the delta strain.
Further to this, the National Cabinet agreed lockdowns in the current phase of the plan would only be used as a ‘last resort’. Although some states have responded that they are already implementing this approach. The problem is ‘last resort’ isn’t exactly a quantifiable distinction.
Additionally, the government plans to adopt the Medicare digital vaccination certificate. The PM suggested that by the end of the month it would be able to be incorporated into Apple Wallets, “and the like”.
A beacon of light for the Webjet share price
The next phase (post-vaccination) of the plan poses lockdowns to occur only in extreme circumstances. In addition to this, arrival caps would be increased – particularly for vaccinated persons.
Where it starts to look interesting for travel shares such as Webjet is the third phase. This is where the plan would remove lockdowns as a control measure entirely and vaccinated persons be exempt from all restrictions, that includes outbound travel.
Hence, if/when we get to this phase, travel companies may start to see international segments come back to life. Mr Morrison pointed out that this would be the phase where travel bubbles may be extended to Singapore and other destinations.
Speaking to the press today, Prime Minister Scott Morrison said:
What it means is, Australia gets vaccinated, Australia is able to live differently. Winning in the post-vaccination phase looks very different to winning in the phase we are in now. Winning now, means we suppress the virus as best as we can.
The announcement follows Webjet CEO, John Guscic’s calls for clear frameworks governing when international borders will open and close, in order to give travellers booking confidence.
We’ve seen significant long-lead time bookings for markets that are currently amber, where they’re making a prediction they will go to green.
From here the plan will go to the COVID-19 Risk Analysis and Response Taskforce to make recommendations for finalisation. The PM anticipates this will be done over the course of the month.
Webjet share price in the rearview
The Webjet share price has endured a volatile year so far in 2021. Between February and March, the company’s shares rallied while domestic restrictions were minimal.
However, the impact of the more virulent delta strain has taken a toll on many travel shares. Even with today’s gain, the Webjet share price year-to-date remains flat.
Should you invest $1,000 in Webjet right now?
Before you consider Webjet, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Webjet wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of May 24th 2021
The Qantas (ASX:QAN) share price finished 2.5% higher today
Here are 3 of the most actively traded ASX 200 shares today
Motley Fool contributor Mitchell Lawler 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 owns shares of and has recommended Corporate Travel Management Limited and 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.