Air NZ (NZX:AIR): What is the impact of delayed border reopening on it?

Highlights

• Air NZ has cancelled 120 flights after a delay was announced in the phased reopening of international borders.
• Nearly 27K customers will be impacted by the move.
• The airline is operating a reduced schedule to Australia but will only be operating services out of Auckland. 

Air New Zealand Limited (NZX:AIR; ASX:AIZ) had to cancel 120 flights after the NZ government announced that it would push ahead its international border reopening plan.  

Chris Hipkins, the COVID-19 Minister, announced on Tuesday that Australian travellers would have to go through isolation until February end. The Government had earlier informed that people coming from Australia would have to self-isolate till mid-January.

All active flights without quarantine from Australia to NZ between 17 January and 28 February 2022 will be terminated and only a restricted roster of these flights will be offered. Customers who still need to fly will have to obtain managed isolation and quarantine allocation before booking a quarantine flight.

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He stated that the move had been taken to give Kiwis some time to get a COVID-19 booster shot and provide them with more protection against new COVID-19 strain, Omicron.

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Air NZ has projected that nearly 27K customers would be affected by flight terminations.

Greg Foran, Air NZ Chief, stated that though the news was depressing, changes had been taken to safeguard Kiwis from the new strain. He also consoled with those who were looking forward to meeting their family and friends.

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Air NZ will keep operating flights to Australia but with reduced numbers and operating services out of Auckland.

The airline has an international flexibility policy for the flights that will depart before 30 June 2022. This allows customers to change their flights with a waiver of fees applied for changes.

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On 22 December, at the time of writing, AIR was trading at NZ$1.495, down 0.99%.

Bottom Line

The changes have been announced to strengthen NZ’s resistance to the new COVID-19 strain, which is rapidly spreading worldwide.

Though the severity of the virus remains unknown, the NZ government plans to keep the country prepared by fast-tracking the booster shot program and improving border defences to keep Omicron out of NZ.