The Air New Zealand [NZX:AIR] share price has leapt over 13% today during a positive start to trading across the NZX.

Air New Zealand — established in 1940 — is the country’s beloved national airline, operating flights to domestic and global destinations. 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 $1.18, and it has a market capitalisation of $1.01 billion.


Why has the [NZX:AIR] share price risen?


The share was previously sold down heavily on the coronavirus risk event. There now appears to be a number of more optimistic considerations driving investor sentiment:

  • Sector leader Auckland Airport [NZX:AIA] has enjoyed strong rise on the back of a major capital placement option.
  • Air New Zealand has arranged ongoing liquidity through a $900 million government loan package.
  • The company is supporting trading through redundancies, cost-cutting, and recalibration of the operation.
  • Competitor VirginAustralia is moving to close its New Zealand operations as it grounds nearly all its planes.
  • CEO Greg Foran has provided strong and transparent leadership.
  • New Zealand is managing its coronavirus outbreak and preparing to come out of a level 4 lockdown.
  • Panic sellers appear to have dissipated in the market, with the focus moving to more long-run investors and bargain hunters.


Where could [NZX:AIR] go from here?


Any positive development in the travel and aviation sector will play into increased optimism on the share price. The recent strengthening of Auckland Airport and possible disappearance of certain airline competitors may improve the outlook for Air New Zealand.

The question now is how long it will take to stage any sort of meaningful air travel recovery? Given world events, it may be a long time indeed.



Simon Angelo


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