How long will the Flight Centre share price keep getting battered by COVID-19?


The Flight Centre Travel Group (ASX: FLT) share price has been struggling over the past three trading days.

Flight Centre shares have fallen 4.2% since the market close on Thursday 21 April to $21.72. In today’s trade, the Flight Centre share price slid 0.05%. For perspective, the S&P/ASX 200 Index (ASX: XJO) dropped 0.78%.

In recent days, Flight Centre has shared insights into the impact of COVID-19 on the company’s financial performance. Let’s take a look at what Flight Centre had to say.

COVID-19 may “continue to adversely” affect Flight Centre for the foreseeable future, the airline noted in a prospectus for the issue of unsecured notes signed off by CEO Graham Turner on Friday.

Commenting on the ‘financial risk’, the report stated:

The COVID-19 pandemic has resulted in a significant short term impact and is expected to have a very significant medium to long term impact on the issuer’s business and operations and in particular, the demand for its services, which has reduced visibility on future earnings and cash flows, and has led to a material decline in revenues.

Flight Centre noted the high number of cancellations places “significant strain” on the company’s cash flows. Events cited in the report that could impact the tourism industry included wars, nuclear threats, terrorist attacks, floods, earthquakes, COVID-19, SARS, or any other disease.

However, today, Flight Centre presented a much more positive outlook in a Morgans roundtable presentation.

Flight Centre said it is “on the path to recovery”. Customers have been queuing outside Flight Centre shops since COVID-19 restrictions were lifted.

Flight Centre added that visits to friends and relatives are underpinning the international travel rebound. The company added: “Consultant productivity currently well above historic levels – looking to immediately recruit 500 leisure travel advisors globally to meet current and future demand.”

Flight Centre continues to be among the most shorted ASX shares, as my Foolish colleague James noted yesterday. The consensus broker position on Flight Centre is hold, according to a report on nabtrade.

Flight Centre share price snapshot

The Flight Centre share price has soared by 26% over the past year. It has ascended 16% this year to date. For perspective, the benchmark index has returned nearly 4% over the past year. In the past month, Flight Centre shares have jumped by more than 13%.

The company has a market capitalisation of about $4.34 billion.

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