Auckland International Airport Limited [NZX:AIA] has seen its share price weaken by 14.09%. This happened as a result of heavy sell-offs during today’s session of bearish trading.
Auckland Airport is the main gateway into New Zealand and acts as the country’s biggest transportation hub. It serves over 20 million passengers annually. It has a strong presence on the New Zealand Stock Exchange, as well as the Australian Securities Exchange.
The company’s share price is currently $5.67, and it has a market capitalisation of $6.8 billion.
Why has the Auckland Airport share price suffered today?
The global impact of the coronavirus continues to hammer the Kiwi economy.
Here are the main developments:
- Air New Zealand [NZX:AIR] has revealed plans to cut its capacity for international flights by over 85%. For now, the company’s stocks are in a trading halt, giving the management time to make a full assessment. Because of Air New Zealand’s close relationship with Auckland Airport, the negative sentiment has had a profound impact.
- Prime Minister Jacinda Ardern has announced stricter quarantine measures. The vast majority of travellers arriving from overseas must now self-isolate — or face stiff legal penalties.
- The health situation in Europe and America continues to deteriorate, with authorities struggling to contain the rising rate of infections.
Naturally enough, a pessimistic mood prevails among investors. Auckland Airport is bearing the brunt of this. It is currently faced with falling passenger numbers, cancelled flight routes, and a prolonged climate of fear.
Where could [NZX:AIA] go from here?
Can we hope for a quick and easy resolution to this crisis?
Well, not quite.
University of Otago public health professor Michael Baker believes that there’s a possibility that the coronavirus problem may stretch until Christmas.
If so, travel and tourism will continue suffer the financial impact of this disrupt.
For the short- to medium-term, the outlook is negative.