The Qantas Airways Ltd [ASX:QAN] share price has reached its highest point since the market crash in March, with renewed hope the skies will soon be clear for take-off.
The ASX has rejoiced this morning, as news of a COVID-19 vaccine and its 90% efficacy has boosted markets around the globe.
With a possible vaccine around the corner, we could soon see travel return to its pre-COVID levels, or at least partially.
At the time of writing, QAN shares are up 49 cents or 10.47% to trade at $5.17 per share.
How long until your next holiday?
According to some, the COVID-19 vaccine developed by drug companies Pfizer and BioNTech could be ready for distribution in a matter of months.
Pfizer said an interim analysis of its vaccine, based on a phase three trial involving 43,538 participants, had shown the vaccine to be potentially more than 90% effective in preventing COVID-19.
The company said it would seek an emergency-use authorisation from the FDA as soon as the vaccine reached a safety milestone, probably in the third week of November.
Both Pfizer and BioNTech would then be able to produce 50 million doses this year (with each patient requiring two doses, one month apart) and up to 1.3 billion next year.
Meaning your next holiday may not be far off, providing we see a border ceasefire from our state governments.
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QAN isn’t the only travel stock responding well to the vaccine.
Booking services stocks, which have been among the hardest hit by the pandemic, are some of the best performers today.
Flight Centre Travel Group Ltd [ASX:FLT] climbed 9.9% to $15.79, Webjet Ltd [ASX:WEB] soared 13.1% to $4.84, and Corporate Travel Management Ltd [ASX:CTD] climbed 11.2% to $19.04.
Is the Qantas share price cleared for take-off?
Despite the tough operating conditions QAN was exposed to after the COVID outbreak, the share price has performed reasonably well.
Since hitting its trough in March, QAN shares have returned 141%.
Throughout the crisis, QAN has managed to maintain a healthy financial position by protecting its cash flows and profitability.
The airline focused on preserving liquidity to safely hibernate the business and allow flying to restart flexibly.
Specifically, QAN has managed to cut cash costs by ~75% in response to an 82% fall in total revenue in Q420.
If a fuller flying schedule can resume in the coming months, we could see a leaner, more efficient airline.
And more importantly, we could see a nice return in dividend payouts.
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