The Flight Centre share price just surged to a 6-month high. Here's why

Flight Centre shares are flying higher on Thursday…

| More on:
A woman on holiday stands with her arms outstretched joyously in an aeroplane cabin.

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

Key points

  • Flight Centre shares hit a 6-month high of $22.54 
  • Confidence among investors is growing as demand for travel is picking up
  • Countries around the world are beginning to remove restrictions which is having a positive effect on the tourism industry

The Flight Centre Travel Group Ltd (ASX: FLT) share price hit a 6-month high after reaching $22.54 today. This comes despite the travel agent not releasing any price-sensitive announcements today.

At the time of writing, Flight Centre shares are swapping hands at $22.46, up 2.84%.

Flight Centre lifts on reopening of tourism industry

As more countries begin to relax their COVID-19 restrictions, ASX investors have become increasingly confident in the sector.

Subsequently, this has driven the Flight Centre share price higher due to pent-up demand across the travel market.

A two-year hiatus from international travel has seen a flurry of passengers dust off their suitcases and head overseas.

Flight Centre has been in the hot seat as market conditions have improved.

In its FY22 half-year results, management noted that gross total transaction value (TTV) has increased quarter-on-quarter throughout the pandemic.

Notably, Flight Centre has become a much leaner and more efficient cost base model.

And with the Omicron variant decreasing in key markets, this is likely to lead to a bumper performance for the company.

In the strongest sign of a return to normalcy, Australia, the United Kingdom, Europe and the United States are now almost free of travel restrictions.

Countries such as Denmark and Sweden have completely removed restrictions and are accepting life with the virus.

While this all points to a rosy outlook now, it's worth remembering that the market can quickly change.

As such, Flight Centre has not provided any specific FY22 profit guidance. This is due to the lack of visibility around the likely time frames for recovery and government reactions to future variants.

Flight Centre share price summary

It's been a rollercoaster 12 months for Flight Centre investors, with its shares up 26% over the period.

When looking at this time last month, the travel agent's shares have risen by 18% on positive investor sentiment.

In contrast, the S&P/ASX 200 Index (ASX: XJO) index has gained 4% over the same time frame.

Based on valuation grounds, Flight Centre has a market capitalisation of around $4.49 billion.

Motley Fool contributor Aaron Teboneras 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 has recommended Flight Centre Travel Group Limited. 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

airline crew stands on tarmac under aircraft
Travel Shares

Qantas shares lower on $120m profit hit

The airline operator is being made to pay for decisions it took during the pandemic.

Read more »

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

One ASX 200 stock down 50% since July this fund just bought

The fund managers saw value in the ASX 200 stock following a 50% share price plunge.

Read more »

A smiling boy holds a toy plane aloft while a girl watches on from a car near an airport runway.
Travel Shares

Would Warren Buffett buy Qantas shares in December 2024?

Is this airline stock an appealing investment today?

Read more »

Woman on a tablet waiting in for her flight in an airport and looking through a window.
Travel Shares

Buying Qantas shares? You'll need to know this

Qantas shares have been soaring higher in 2024.

Read more »

Woman on a tablet waiting in for her flight in an airport and looking through a window.
Travel Shares

Qantas share price hits turbulence as engineers down tools

Qantas’ engineers are displeased with the results of pay negotiations.

Read more »

A woman ponders a question as she puts money into a piggy bank with a model plane and suitcase nearby.
Travel Shares

Will the Qantas share price take off again in 2025?

The Flying Kangaroo has smashed the market this year. Could it do the same in 2025?

Read more »

Man sitting in a plane seat works on his laptop.
Travel Shares

Why the soaring Qantas share price could be 'difficult to sustain'

The Qantas share price has been a stellar performer in 2024, up 68.7% since 2 January.

Read more »

A woman looks up at a plane flying in the sky with arms outstretched as the Flight Centre share price surges
Travel Shares

Why the Qantas share price can keep flying to new highs

Qantas shares' new record highs are forecast to be broken in 2025 by this top broker.

Read more »