Flying start to market recovery

ASX rises, travel stocks soar

TRAVEL stocks have soared on the back of an overwhelming response to the federal government announcement that Australians would be free to travel overseas from November.

OMG chief executive Ivan Tchourilov said the sharemarket had recovered some of last week’s losses.

“The end of lockdowns in NSW is fast approaching, fuelling a surge in travel stock valuations,” he said.

The ASX 200 rose 1.3 per cent to 7278.5 points and the All Ordinaries added 1.2 per cent to 7576.8 points. The top performer on the ASX 200 was Flight Centre which surged 9.6 per cent to $23.95.

Webjet shares rallied 2.9 per cent to $6.66, Corporate Travel Management climbed 3.3 per cent to $25.17, Qantas rose 1.75 per cent to $5.81 and Helloworld Travel rocketed 14.82 per cent to $3.10.

Flight Centre chief executive Graham “Skroo” Turner said it was clear the appetite for travel had not been diminished by the pandemic, judging by the rebound in the northern hemisphere.

“Markets in Europe, the UK, North America have been coming back strongly for a while now and trans-Atlantic travel reopens on November 1,” Mr Turner said. “I’m not sure how that affects the share price but we rely a lot on international travel whether it’s in Europe or elsewhere, and I presume that’s what’s influencing investors.”

Rex deputy chairman John Sharp said the share gain reflected the fact the “worst is behind us and the best is ahead of us”.

“We’ve now got a very bright light burning at the end of a very short tunnel,” he said. “We’ve got the lockdown being lifted in NSW very shortly, and we’ve got the prospect of it happening in Victoria. (Demand) won’t go from zero to hero overnight but it will ramp up.”

The gains came as drugmaker Merck pushes ahead with approval for a new Covid-19 pill that has been shown in trials to cut the risk of hospitalisation by 50 per cent. If approved it would be the first tablet treatment for Covid-19, and could contribute to reducing traveller angst about exposure to the virus.

Meanwhile Webjet reported an immediate surge in demand for international flights following last Friday’s announcement that Australian border restrictions would ease in November.

Webjet chief executive David Galt said the number of bookings through the site more than doubled in the three days after the announcement, with flights to London in greatest demand. “There were also bookings to Vancouver, Denpasar, Los Angeles, Bangkok and Honolulu,” Mr Galt said.

Qantas continued to celebrate its plans for the return to international flights, with an extension of its Emirates’ partnership to 2028.