Domestic flights, private jets are holding up as global travel industry nosedives
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Arguably the industry most affected so far by COVID-19 is travel and tourism, but it’s not all doom and gloom. While international travel has taken a battering, domestic travel has been holding up.
This morning Virgin Australia (ASX:VAH), which has shrunk from a $1.1 billion company to a $440 million company in just 6 weeks, announced reductions to international services while confirming that “as a largely domestic airline, we are less exposed to the impact on international travel”.
“It’s worth noting that domestic operations account for 88 per cent of our passengers and 78 per cent of our flight revenue,” managing director Paul Scurrah said.
“Pleasingly, our travel bookings to Western Australia and local leisure destinations such as the Gold Coast, Sunshine Coast, and Hamilton Island continue to be ahead of where they were at the same time last year.”
However his words weren’t enough to stop the stock falling another 12 per cent today.
Earlier this week, travel agency Helloworld Travel (ASX:HLO) also said domestic travel demand had increased, despite impacts from COVID-19 and the bushfires. Nevertheless, the company suspended its earnings guidance and said it was reducing discretionary expenditures.
If you can afford a private jet, why not use it? You get to avoid the crowds at airports and onboard.
European private jet charter LunaJets reported a 45 per cent increase in inquiries in recent days.
“Flying private, clients will have limited contacts during their journey, limited to airport agents, mandatory security staff and crew. Therefore, you avoid Coronavirus potential exposure,” said head of sales Alain Leboursier.
In terms of ASX small caps the closest is Alliance Aviation (ASX:AVQ) which operates charter flights for the mining sector. It has not commented since its half yearly results in February and has dropped by a third this year.