Qantas (ASX:QAN) loses altitude on extended border closures

Company News

by Michael Luu

Stocks in travel and aviation services providers have been in descent today, following signals from last night’s Federal Budget announcement that Australia extend its national border closures to the end of FY22. National flag carrier Qantas was among airlines losing altitude on the market today, shedding 3.4 per cent to $4.50 by 2.30pm.

The owner of Australia’s largest passenger aircraft fleet has been forced to postpone the resumption dates of a majority of its international services for a second time, in response to the news.
Positive sentiment driven by vaccination progress and economic recovery led the $8.8 billion airline to schedule most of its international flight routes for restarts in the last quarter of the calendar year. The company began offering flight deals to passengers for July. These flights were then delayed for the first time to October.

The Federal Budget’s stance on international travel meant the aviation giant had to cancel its recovery plan for international flights, as the government’s new announcement slashed hopes of Aussie tourists’ movements to overseas destinations in the near future.

The only silver lining in the current circumstances is the trans-Tasman travel bubble between Oceanic neighbours Australia and New Zealand. However, Qantas has expressed optimism that Australia could continue to make similar arrangements with foreign jurisdictions that have proven to be COVID-safe.

Qantas addressed possible future travel treaties, “additional bubbles will open once Australia’s vaccine rollout is complete to countries who, by then, are in a similar position, but it’s difficult to predict which ones at this stage”.