What a time to be alive!
The S&P/ASX 200 Index (ASX: XJO) has had one of the roughest and most volatile days in history. It looks as though the markets have settled for around a 2% gain at the time of writing, but at one point, the ASX was down over 8%.
That would have put it at the second-worst day for ASX shares in history (behind the Black Monday stock market crash of 1987).
It's no secret that the hardest hit ASX shares this share market crash have been travel-related ones. Any company with 'flight', 'travel' or 'airways' in its name has been absolutely smashed over the last month.
Qantas Airways Ltd (ASX: QAN) was flying at record altitude in January – reaching over $7 a share. Today, Qantas shares are going for just $3.26 – a massive 53% drop. Its arch-rival Virgin Australia Holdings Ltd (ASX: VAH) is at a low of 8 cents after dropping as to a record low of 5 cents earlier today. That one was at 15 cents in January
Corporate Travel Management Ltd (ASX: CTD) – an online travel services provider for businesses – was over $22 a share in January. Today, its asking $8.70.
Travel agent giant Flight Centre Travel Group Ltd (ASX: FLT) was close to $50 a share in January. Today, FLT shares will set you back just $17.75 each.
You get the idea.
Is this a buying opportunity for ASX travel shares?
I do think there are some opportunities in this sector right now.
Yes, the coronavirus and the global travel bans being announced will decimate this sector. But only in the short-term. When the coronavirus fears are over (which they will be at some point), I expect the global travel industry to return to normal. It might take months, or even years to be back to full capacity.
But if you're a long-term investor, does it matter?
These companies are now being priced as if they're about to go bankrupt. But I don't think our national airline will bite the dust. Nor the well-run companies that are Flight Centre and Corporate Travel Management (I'm less confident with Virgin).
But I think everything will be fine in the long-run, and today's rock-bottom prices might look like the bargains of the century. Of course, there is still huge risk in this area and I wouldn't be betting the house. But it might be a compelling value play, nonetheless.
