Why the Flight Centre share price is rocketing 15% higher

The Flight Centre Travel Group Ltd (ASX:FLT) share price is surging higher after returning from its trading halt. Here's what you need to know…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Flight Centre Travel Group Ltd (ASX: FLT) share price has returned to trade this morning and rocketed higher.

At the time of writing the travel agent giant's shares are up 15% to $11.37.

Why was the Flight Centre share price in a trading halt?

Flight Centre requested a trading halt on March 19 whilst it looked into the impact the coronavirus was having on its business.

After a thorough review, the company concluded that it needed to cut its costs materially and raise funds in order to get through this crisis.

In respect to its costs, Flight Centre has announced a large number of cost control initiatives and cash preservation initiatives. This includes the closure of more than 50% of its global leisure shops.

All in all, this is expected to reduce its annualised operating expenses by approximately $1.9 billion by July 2020. Which will mean Flight Centre has monthly operating costs of approximately $65 million, which I estimate is a reduction from ~$223 million previously.

That certainly is a big saving and leaves Flight Centre well-positioned to ride out the storm and come out the other end in a strong position. Especially following the completion of its equity raising.

Equity raising completes.

This morning Flight Centre announced the completion of its placement and institutional entitlement offer which raised a total of $562 million at $7.20 per new share.

Flight Centre's Managing Director and Chief Executive Officer, Graham Turner, commented: "We are extremely pleased and appreciative of the support we have received from both our existing shareholders and new investors. The suite of initiatives announced yesterday, including the equity raising, will enable Flight Centre to trade through this period of disruption to the global travel industry, while continuing to deliver exceptional service to our corporate and leisure customers."

Once the retail component is complete, Flight Centre is expected to have approximately $2.3 billion of liquidity. Given the reduction in its monthly operating costs, the company has sufficient liquidity to last it through even the most bleakest outlooks. 

This, and positive COVID-19 developments, appear to have gone down well with investors today, leading to its shares rocketing higher. Elsewhere in the industry, the Webjet Limited (ASX: WEB) share price is up 9% in early trade.

Wondering where you should 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 over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Flight Centre Travel Group Limited and Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX shares finished the trading week on a high this Friday.

Read more »

A businessman stacks building blocks.
Technology Shares

6% gain! What's up with Block shares today?

Block shares are up more than 34% since 2 May.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Share Gainers

Why ARB, Block, Mayne Pharma, and Paladin Energy shares are charging higher today

These shares are having a strong finish to the week. But why?

Read more »

A woman puts her hands up as she smashes and breaks through a glass ceiling.
Share Gainers

How these 5 ASX 200 stocks are smashing the benchmark this week

These fives ASX 200 stocks have made some very happy shareholders this week. Here’s how.

Read more »

A man looking at his laptop and thinking.
Share Gainers

Here are the top 10 ASX 200 shares today

The markets lost their steam this Thursday.

Read more »

Ecstatic woman looking at her phone outside with her fist pumped.
Share Gainers

Why Catapult, Hutchinson, SKS, and West African shares are pushing higher today

These shares are having a strong session despite the market weakness.

Read more »

Rising gold share price represented by a green arrow on piles of gold block.
Gold

Up 72% in 2025, why is this ASX 200 gold stock racing ahead of the benchmark again today?

Investors are bidding up this high-flying ASX 200 gold stock again on Thursday. But why?

Read more »

Businessman smiles with arms outstretched after receiving good news.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a wonderful Wednesday session for investors today.

Read more »