What could Sydney Airport's results mean for Webjet (ASX:WEB) shares?

What are the key takeaways for the Aussie travel industry?

| More on:
A paper plane crashed in sand.

Image source: Getty Images

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

Webjet Limited (ASX: WEB) shares have been under pressure once again in 2021. Shares in the online travel agent have fallen 7.2% lower this year as COVID-19 restrictions continue to disrupt business.

Investors want to know that there's light at the end of the pandemic tunnel. That's where the August earnings season, including the recent Sydney Airport Holdings Pty Ltd (ASX: SYD) results, could be helpful to see what's happening in the travel industry.

What could Sydney Airport's results mean for Webjet shares?

For those who missed it, Sydney Airport released its latest half-year result on Friday. Some of the big takeaways were:

Webjet shares fell 1% lower on Friday with ASX travel shares across the board being hit hard. One notable item from Sydney Airport's results was the overall passenger numbers. Australia's busiest airport reported a 36.4% decline in pcp with a 91% drop in international arrivals.

In what Sydney Airport CEO Geoff Culbert described as a "challenging six months", there were a couple of positives. One of those was the trend of increasing passenger numbers once border restrictions do ease in between lockdowns. That implies that there is still demand for domestic and limited international travel when available.

Webjet makes the majority of its earnings in commissions on travel bookings. That means investors looking ahead to post-pandemic life could be encouraged by trends of increasing demand and the potential impact on earnings.

Webjet shares have been smashed during the pandemic as the broader travel industry looks to re-invent itself. One possible saving grace that Sydney Airport is holding onto is the vaccine rollout programme.

Webjet investors will be hoping the country hits its vaccination targets sooner rather than later to reduce disruption and increase earnings potential.

Motley Fool contributor Ken Hall 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 Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Travel Shares

A female cabin crew member on a place looks like she has a headache.
Travel Shares

Why this expert is calling time on Virgin Australia shares

A leading expert is calling time on Virgin Australia shares. But why?

Read more »

Couple at an airport waiting for their flight.
Travel Shares

Macquarie increases price target for Qantas shares

Qantas shares hit a new all-time high today.

Read more »

Happy woman trying to close suitcase.
Travel Shares

Guess which ASX travel stock Macquarie just named as its top pick with 32% upside?

While Macquarie sees value across the sector, it named a clear favourite. 

Read more »

A man in a dark blue suit walks through an airport past floor-to-ceiling windows with a Qantas plane flying in the distance
Travel Shares

Up 16% this year, does Macquarie rate Corporate Travel Management shares a buy, hold or sell?

Does the travel stock have further to fly?

Read more »

A group of young people lean over the rails overlooking Sydney's Circular Quay and check out the sights of the city around them.
Travel Shares

Can these two battered ASX travel shares bounce back?

Ahead of important tourism data this week, these two travel companies could be buy low candidates. 

Read more »

Man sitting in a plane looking through a window and working on a laptop.
Travel Shares

Did Flight Centre, Air New Zealand, or Qantas shares fly highest in FY25?

How did these ASX travel shares perform last financial year?

Read more »

Man waiting for his flight and looking at his phone.
Travel Shares

The Virgin Australia share price just slipped back below IPO levels. Should I buy shares today?

A leading expert offers his forecast on the struggling Virgin Australia share price.

Read more »

A woman reaches her arms to the sky as a plane flies overhead at sunset.
Travel Shares

The Qantas share price flew 88% higher in FY 2025! Here's how

Qantas shares surged 88% in FY 2025 to new all-time highs. Here’s what happened.

Read more »