The share prices of leading Australian travel companies and airlines dipped yesterday after oil prices rose strongly and British holiday giant Thomas Cook slashed its annual profit forecast.
Thomas Cook shares fell as much as 25% after the travel company, one of the world’s most famous and long established, blamed the northern hemisphere summer heatwave for a drop in bookings.
“Many customers” had deferred booking overseas holidays because the weather had been so good at home in June and July, the holiday firm said.
Thomas Cook said this had led to “higher than usual levels of discounting” in August and September, the BBC reported.
As well as that, oil prices roared ahead after Saudi Arabia and Russia ruled out an increase in production in the near term. Fuel is a major cost for airlines and an influence on fares. The effects flow on to travel companies.
Qantas, Virgin Australia, Air New Zealand, Webjet, Sydney Airport and Flight Centre were among travel- and flight-related companies to feel the dampening effects yesterday.
MarketMatters.com.au reported that Webjet was hardest hit, trading down -6% at one stage. Webjet has run the majority of Thomas Cook’s wholesale hotels business since 2016, the site said.
In August 2016, Thomas Cook signed a supply deal with Webjet under which the British company transferred about 3000 hotel contracts to Sunhotels, Webjet’s European online accommodation business, Reuters reported at the time.
The Brent crude oil price climbed above the USD 80 a barrel mark for the first time in four years yesterday, which didn’t help travel stocks.
Share prices fluctuate constantly and travel companies are resilient. Today and the rest of the week should give a better picture of the way travel and airline stocks are headed.
Written by Peter Needham
.jpg){kind=tracking}
