Key Points
- Webjet shares impacted following latest announcements by the West Australian government
- No definitive reopening of domestic borders
- WebBeds business performing well in key overseas markets
The Webjet Limited (ASX: WEB) share price rapidly descended last week on the back of a broader market sell-off.
At Friday's market close, the online travel agent's shares tumbled 2.30% to $5.09 apiece. This means that its shares lost 6.78% since this time last week, reflecting a near 6-month low.
In contrast, the S&P/ASX 200 Index (ASX: XJO) dropped 2.27% to 7,175.8 points on Friday. The benchmark index sunk 3.99% for the week, which was a 7-month low.
What happened to Webjet shares?
Investors have continued to dump the Webjet share price following a sluggish recovery of the travel market.
A rise in COVID-19 cases across Australia has led the Western Australian government to delay the reopening of their borders. This has not only led domestic passengers to cancel holiday plans but has also affected international tourists.
Double vaccinated interstate and international travellers would have been able to enter Western Australia without quarantine from 5 February. However, with the border remaining closed indefinitely, it could be until easter before the restriction is lifted.
A reported 6,000 interstate and international passengers were expected to arrive at Perth Airport on the border reopening date.
Investor confidence has turned sour following COVID-19 outbreaks across the country. No doubt, this has caused a dent in potential Webjet earnings for the 2022 financial year.
Nonetheless, the company's WebBeds business in North America is tracking ahead of pre-COVID total transaction value (TTV) volumes. On the other hand, Europe is forecasted to return to pre-COVID TTV levels in the second-half of FY23.
A retained global footprint, hotel supply relationships and global customer network have led the charge.
Looking ahead, Webjet is scheduled to report its FY22 results towards the backend of May 2022.
Webjet share price summary
Year to date, the Webjet share price has fallen by almost 2% following a surge in COVID-19 cases in Australia.
Based on valuation grounds, Webjet has a market capitalisation of around $1.94 billion, with approximately 380.51 million shares on issue.
