- Travel companies are gearing up to meet challenges after borders open up fully
- Many of them are likely to face labour shortages
- It is expected that this would give a boost to technology
Travel and hotel companies are excited about the opening up of travel and gearing up to meet challenges post opening up of borders in July.
The most important foreseeable challenge would be a shortage of staff. This would give a boost to the use of technology to lessen the dependence on human labour for various functions like luggage handling and check-ins.
Air New Zealand is likely to get on with self-help snacks in the cabin. It is also experimenting with a new lie-flat sleep product for economy travellers. The development has taken 3 years of research, with inputs from 200 customers. If that gets the nod, Economy Skynest, as it is called, will have sleep pods even for economy flyers. On the other hand, hotels are also gearing up to be more inclusive and accommodative for LGBTQs.
Against this background, let’s see how the leading travel stocks are performing.
Source: © 2022 Kalkine Media®
Air New Zealand (NZX:AIR, ASX:AIZ)
Air is the national airline of New Zealand. In an update on the outlook for FY22, the airline said it would be seeing strong passenger booking for short-haul flights as well as international passengers after the borders open up fully. It said while business travel demand had almost returned to pre-COVID-19 levels, domestic demand was also moving up.
Since the economic environment continues to be uncertain, and jet fuel prices rise higher, it is expecting to cut down on its losses only by NZ$50 million. It expects its losses to be in the range of NZ$750 million as against the earlier projection of NZ$800.
On 30 June, the stock was trading up 1.77% at NZ$0.575, at the time of writing.
Auckland International Airport Limited (NZX:AIA)
AIA is the main international airport of New Zealand. AIA has made significant changes in leadership positions to lead airports’ transformation to improve infrastructure and facilities.
This is a new step the Airport has taken to increase the traveller base post borders open up fully. The new positions are meant to aid this change.
The two new positions are GM, customer and aero commercial, and GM, Infrastructure. On 15 June, in its monthly traffic update for April, it reported that AIA’s total passenger volume had increased 4.2% in the month of April 2022 versus April 2021. It said that compared to April 2021, international passengers were up 233%, however, domestic passengers were down 22.4%.
On 30 June, the stock was trading down 1.76% to NZ$7.250, at the time of writing.
Serko Limited (NZX:SKO)
SKO is a travel company that recently announced its FY22 results. It reported an NZ$36 million loss and this was the biggest loss suffered by the company since it registered on the NZX. It expects to do better once travel opens up fully. In March, SKO announced that its travel volumes were picking up and April was better than March.
The Company is hopeful and would be stepping up investments as it expects to recover after three years of losses.
On 30 June, the stock was trading flat at NZ$3.790, at the time of writing.
Bottom Line: Travel companies are expecting a big jump in their profitability after travel opens up fully. For that, they are making changes and reinventing their systems to meet new travel realities.