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Air New Zealand (ASX:AIZ) share price takes off on Trans-Tasman travel bubble news

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The Air New Zealand Limited (ASX: AIZ) share price is flying today. The positive price movement comes amid intense speculation regarding travel today. This was later confirmed by the New Zealand government, announcing quarantine-free travel between Australia and New Zealand.

At the time of writing, shares in the Kiwi carrier are up 6.65% to sell for $1.69. By comparison, the Qantas Airways Limited (ASX: QAN) share price is up 2.75% and the S&P/ASX 200 Index (ASX: XJO) is up 0.97%.

Let’s take a closer look at today’s news and how it’s affecting the Air New Zealand share price.

Trans-Tasman travel bubble

According to the Australian Broadcasting Corporation (ABC), reports emerged this morning that New Zealand prime minister, Jacinda Ardern, would announce a trans-Tasman travel bubble between her nation and Australia. In a press conference late this afternoon, Prime Minister Arden confirmed these reports.  Furthermore, announcing that New Zealand would accept Australian international arrivals without first having the need to quarantine. The borders will open 11:59pm NZST Sunday 18 April 2021.

“Quarantine-free travel between Australia and New Zealand will be safe,” Ms. Arden said.

However, Ms Arden warned travellers the borders could snap back shut again at a moment’s notice. This is similar to the situation many Australians have experienced travelling inter-state.

“We would likely suspend flights from a state with multiple suspected, unknown cases.” Ms. Ardern also confirmed the New Zealand government would not compensate any travellers who are affected by any sudden travel restrictions.

New Zealand shut its international borders at the onset of the COVID-19 pandemic in March 2020. In October, Australia opened its borders to New Zealand arrivals without the need to quarantine. After many aborted attempts, New Zealand will now open its borders to Aussies.

According to Stats New Zealand, Australians made up the largest portion of tourists in the country in February 2020, prior to the start of the pandemic. Around 132,000 Australians arrived in New Zealand that month. That’s 2.5x more than the next highest nationality (China). Since Australian choices of nations to visit is limited to one country, this could be good news for New Zealand tourism. The Air New Zealand share price rise today reflects this fact.

Air New Zealand share price snapshot

The Air New Zealand share price is up 106.79% since this time last year. Of course, the airline was deeply affected by the coronavirus outbreak, along with other travel shares. At the beginning of February 2020, however, the Air New Zealand share price was trading for $2.65. That’s a negative return on investment (ROI) of 36.04% to today.

Air New Zealand has a market capitalisation of $1.8 billion.

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