AIR, AIA: 2 aviation stocks in news as Air NZ plans more routes in July

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AIR, AIA: 2 aviation stocks in news as Air NZ plans more routes in July

 AIR, AIA: 2 aviation stocks in news as Air NZ plans more routes in July
Image source: © Selvamartist | Megapixl.com

Highlights

  • Air NZ is restarting flying on 14 more international routes in July.
  • The national carrier expects a loss of less than $750 million in FY22.
  • AIA’s total passenger volumes and international passengers increased in May.

Amid strong passenger demand and NZ progressing with its staged border reopening, Air NZ is restarting flying on 14 more international routes in July. The airline is targeting to fulfill 100% of its pre-COVID-19 domestic capacity and 75% of international capacity by the end of 2022.

Air NZ CEO Greg Foran confirmed the robust forward demand in spite of fairly high ticket prices because of high fuel costs and capacity constraints. The airline is also bringing back Boeing-777-300 ERs on certain passenger routes to increase capacity.

Air NZ will double its services across the Tasman and resume its popular direct services like Hobart, Adelaide and Sunshine Coast in July, as per Foran. The airline will also return to all 9 Australian ports.

Amid this backdrop, let’s see how these 2 NZX-listed aviation stocks are performing.

Source: © Wisconsinart | Megapixl.com

 

Air New Zealand Limited (NZX:AIR)

The national carrier of Kiwiland, Air NZ, expects a loss of less than $750 million in its FY22 results after estimating a stronger FY22 result in May and a loss of less than $800 million in March.

The airline is seeing strong passenger booking activity after NZ borders opened. Business-related demand returned to nearly 90% of levels before the COVID-19 pandemic, as per the airline.

Factors like travel curbs in some markets, the Russia-Ukraine conflict leading to high jet fuel prices and disruptions due to new covid variants continue to pose challenges.

The airline is relaunching 14 international routes in July and plans to rehire or hire over 2K Air NZ staff.

On 28 June, at the time of writing, AIR was trading flat at $0.565.

 

Auckland International Airport Limited (NZX:AIA)

Auckland Airport's total passenger volumes rose over 4% in April 2022 compared to the same month in 2021. Its international passenger demand also increased 94.4% on the prior month due to the easing of border curbs and school holidays.

The traffic preview report for May showed that AIA's total passenger volumes rose 19.3%, and international passengers increased 108.7% in May compared to the same month in 2021. The demand on the domestic network improved 11% on the previous month and short-haul international traffic improved 47% in May 2019, with 206K passengers travelling in May 2022.

On 28 June, at the time of writing, AIA was trading 0.96% in the green at $7.35.

 

Bottom Line

Demand for travel is increasing as NZ progresses with its border reopening plans. However, airlines are facing increased fuel costs and capacity constraints, leading to higher ticket prices for customers.

 

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)

 

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