The Flight Centre Travel Group Ltd (ASX: FLT) share price is heading south today. This comes despite the travel agent not releasing any price-sensitive announcements today.
At the time of writing, Flight Centre shares are edging 2.46% lower to $19.82. It's worth noting its shares have now fallen by more than 12% in the past month.
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What's going on with Flight Centre?
Investors have been selling off Flight Centre shares following a rise in COVID-19 cases in Victoria and the Northern Territory.
As the super infectious virus spreads through communities, fears are growing that the outbreak could escalate.
In the past 24 hours, Victoria has recorded 1,273 cases, almost 60% higher than the 797 cases recorded on Tuesday. Despite the state being 88.5% fully vaccinated, if cases continue to surge, the relaxed restrictions implemented today could be reverted.
This is now happening around the world with a prime example being the world's most vaccinated country, Gibraltar, cancelling its official Christmas celebrations. A number of cases have been reported and authorities have released new guidelines to manage the situation.
In the Northern Territory, 2 new cases were detected overnight, bringing the total to 253 cases. A remote Aboriginal community was recently forced into a 3-day lockdown, a first since the pandemic began.
Flight Centre relies heavily on domestic and international travel to generate revenue to see the business through. Before COVID-19, the Sydney to Melbourne route was considered the third busiest route in the world.
In the company's annual general meeting (AGM) last month, management highlighted that sales revenue increased month-on-month. In particular, both the leisure and corporate segments ticked up a notch during Q4 FY21. Corporate transaction numbers were at 50% before COVID-19, representing around 40% of total transaction value (TTV).
Flight Centre noted countries, including the United States, Canada, and the United Kingdom, are poised for strong returns in FY22. Coupled with its leaner and more efficient cost base model, this is expected to provide bumper profits over the long term.
All eyes will be on Flight Centre's FY22 half-year results which are expected to be released on 23 February 2022.
Flight Centre share price summary
Since this time last year, the Flight Centre share price has travelled 23% higher as domestic and international borders gradually reopened. When looking at the year to date, its shares have pushed slightly ahead, with a 25% gain.
On valuation grounds, Flight Centre commands a market capitalisation of roughly $3.96 billion, with approximately 199.57 million shares on issue.
