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the Webjet Limited (ASX:WEB) The stock price is in the red on Monday as the cost of international travel could rise.
As of this writing, Webjet stock price is $5.09, 3.6% lower than its previous close.
Monday is also proving difficult in the broader market. At this moment, the S&P/ASX 200 Index (ASX: XJO) and the Index of all ordinaries (ASX:XAO) both fell around 1.2%.
Let’s take a look at what could weigh on the share price of Webjet and its ASX travel peers.
What drives Webjet stock price down?
Webjet stock price tumbles as oil price rises and Russia President Vladimir Putin warns that airlines that avoid flying over Russia will see their costs rise.
The Brent futures price is currently up 8.3% to US$127.90 a barrel, according to data from CNBC. Meanwhile, West Texas Immediate futures rose 7.5% to US$124.36 a barrel.
Additionally, many international airlines, including Qantas Airways Limited (ASX: QAN), take longer routes to avoid flying over Russia.
The new flight paths will likely create additional air travel time for travelers and, likely, additional costs for airlines.
According to Russian media, CASSPutin predicts that such costs could see many international airlines raise their airfares to recoup the extra expense.
Qantas’ modified ‘kangaroo route’ has been flying over the Middle East and southern Europe to dodge the Russian landmass since last Sunday. This adds one flight hour to the trip.
Of course, higher ticket prices could potentially hurt Webjet’s profit margin. As a result, concerns about additional costs facing airlines could weigh on Webjet’s stock price today.
At least the online travel agency’s stock isn’t the only one in the red.
Webjet share price still outperforms Qantas, Flight Center Travel Group Ltd (ASX: FLT), and Business Travel Management Ltd (ASX:CTD). They fell by 7.4%, 5.7% and 4.6% respectively.