Exemption around Essential business travel: A Glance at QAN, TCL and AQZ

Summary

• Australian borders are likely to remain closed at least till mid-September.
• Prime Minister stated that discussions are in progress with ACT and South Australia. He asserted that states need to relax restrictions for interstate travel before allowing international travel.
• In South Australia, border restrictions are eased for people coming from Western Australia, Northern Territory while in Western Australia, strict border rules are in place. No one can enter without G2G PASS.
• Ease in travel restrictions will improve domestic and regional flights Qantas and Jetsar in June and July 2020.

According to a recent announcement made by Australian Prime Minister, Australian borders would remain close till mid of September 2020 and possibly into 2021. In an interview with Ben Fordham of 2GB on 18 June 2020, Prime Minister Scott Morrison was asked about the 300 international students that two universities in ACT want in July 2020. He replied that the discussions were ongoing with the ACT and South Australia and that the later was informed that they could not allow people to come from Singapore if people cannot fly from different states within the country. In the first instance, the preference would be given to domestic students.

Prime Minister also pointed out that there are about 5,000 jobs that are lost a week. Hence, states are being pushed to open state borders.

In South Australia, border restrictions have been eased for people coming from Western Australia, Tasmania and the Northern Territory and they would not be required to quarantine themselves for 14 days. Important travellers under a provision of Schedule 1 should maintain & preserve documents of close contacts for 14 days starting from the date of appearance in the state.

In Western Australia, stringent border controls are in place to restrict the spread of the virus. People cannot enter the state without exception. In case any person meets exemption criteria, they can apply for G2G PASS online form, and it should be submitted three days before they travel. Presently, travel is allowed across all regions in Western Australia except entry into remote Aboriginal communities.

People from other nations with a compassionate or compelling reason to travel to Australia would have to undertake the compulsory 14-day isolation at specified facilities in their port of arrival. These travellers should have an exclusion from the Australian Border Force Commissioner.

In this backdrop, let us look at three ASX-listed stocks and see their recent updates:

Qantas Airways Limited (ASX:QAN)

Qantas Airways Limited is engaged in the operation of international and domestic air transportation services, the sale of international and domestic holiday tours as well as related support activities.

Increase in Domestic Flying with Ease in Travel Restriction:

On 4 June 2020, Qantas Airways Limited, in its media release updated that the Company and Jetstar would expand their domestic and regional flights for June and July 2020 with the relaxation in travel restrictions.

The added services will expand from 5% of the pre-COVID-19 level to 15% by June 2020 end. This indicates over 300 additional return trips each week.

More flights would run during July 2020 seeing the travel request as well as additional ease in the state border restrictions.

Stock Information:

By the market closure on 18 June 2020, QAN shares settled at A$4.350, down 3.761% from the previous close. QAN has a market cap of A$6.74 billion and ~1.49 billion outstanding shares.

GOOD READ: Is there Light at the End of Tunnel for International Flights in Australia?

Transurban Group (ASX:TCL)

Transurban Group owns, operate, and develop electronic toll roads and intelligent transport systems.

On 17 June 2020, TCL announced that Transurban Road Safety Centre (TRSC) that was established in 2017 in partnership with NeuRA (Neuroscience Research Australia) was provided with a green signal for the next three years.

TRSC is engaged in researching the reasons for the road injuries and work on the ways to prevent these injuries by improving safety equipments and ensuring the use of these equipments in an effective way.

With the signing of the agreement, TRSC partnership has extended till 2023.

Results Achieved to date:

Apart from starting Australia’s only research-dedicated crash testing facility, TRSC made progress to five strategically important road safety research projects:

• Older drivers & comfort accessories
• Integrated child booster seat study
• Impact of chest clips in child restraints
• Enhanced dynamic analysis of child restraints
• Submarining in smaller occupants.

Two Years Goal:

• Motorcycle fuel tank syndrome — injury risk and prevention of pelvic injuries
• Dynamic assessment of child restraint systems in modern, practical crash situations
• The impact of sitting position on injury risk for young and older adults and kids.
• Testing enhanced features of child restraints to lessen misuse.
• Occupant protection in the rear seat.

Stock Information:

By the market closure on 18 June 2020, TCL shares settled at A$14.700, down 0.407% from the previous close. TCL has a market cap of A$40.37 billion and ~2.74 billion outstanding shares.

Alliance Aviation Services Limited (ASX:AQZ)

Alliance Aviation Services Limited is the premium air charter operator in Australia that provides dedicated contract, charter and aviation services to the resource, tourism, and MICE industries.

Successful completion of A$91.9 million:

On 12 June 2020, Alliance Aviation Services Limited announced the completion of A$91.9 million institutional placement of new fully paid ordinary shares in the company to qualified institutional investors at A$2.95 per share.

The objective of capital raising was to provide funding support to its growth strategy, which includes identification and evaluation of possible expansion opportunities that stemmed from COVID-19 pandemic. These include:

• Provision of additional facilities to the present customers related to changes in their air travel needs due to COVID-19.
• Continue to offer services to entities that were not current long-term clients of Alliance earlier to COVID-19.

Alliance intends to purchase more aircraft further to get benefitted of these growth opportunities.

Stock Information:

By the market closure on 18 June 2020, AQZ shares settled at A$3.010, up 1.007% from the previous close. AQZ has a market cap of A$472.66 billion and ~158.61 million outstanding shares.