At the time of writing the Webjet share price is trading at $5.62, down 4.42%.
Webjet Ltd [ASX:WEB] fell 78.82% from January when the COVID-19 pandemic hit. Are they now recovering?
Webjet and the global lockdown
Webjet sell airline flights online, as the name gives away.
Along with hotels, holiday packages, car hire and other travel-related experiences.
But this year the coronavirus turned this usually profitable business upside down.
COVID stopped global travel in its tracks. Countries worldwide shut their boarders as did states within countries.
Many states and cities around the globe issued strict lockdown orders and confined people to their homes.
With the cities empty and no global travel, companies like Webjet had to go into crisis mode to survive.
Managing director John Guscic and the company’s bord of directors volunteered to take a 20% pay cut along with the company taking action to raise capital.
Borders are now starting to open in Australia, but large parts of the Northern Hemisphere are still in lockdown.
Will Webjet recover?
COVID-19 is far from over.
The US along reported over 180,000 new cases at the time of writing. Europe isn’t in any better shape.
Until a vaccine for the virus is created, the global lockdown looks to continue.
In Australia border restrictions are slowly easing.
Queensland is opening its borders to Victoria and Greater Sydney on 1 December. With Christmas coming up fast, this is welcome news for people wanting to take a holiday and see family.
The excitement surrounding the borders opening looks to of given the WEB share price a short-term run-up.
If the buyers stay behind the move, then the level of $6.51 may provide future resistance.
If the sellers take hold and turn price to the downside then the levels of $4.89 and $4.37 may come into play.
Overall Webjet is a good business, but in the current climate it faces a lot of problems that are out of its control.
Until the world is back to normal and a vaccine for the COVID-19 virus is found, Webjet will continue to be held back in the flights it can sell.
Webjet is a good one to put on a watch list as I believe once everything is back to normal, there may be a lot of growth to be realised in their share price.
For Money Morning
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