Trans-Tasman Bubble: Does this mean take off for ASX listed airports?

ASX listed airports might be set to take off today after the trans-Tasman Bubble was announced this afternoon. The Sydney Airport Holdings Pty (ASX: SYD) share price has jumped slightly since the news was announced but the Auckland International Airport Limited (ASX: AIA) share price is experiencing some turbulence.

At the time of writing, the Sydney Airport share price is up 2.8% today, trading for $6.24.

While the Auckland International share price is $7.15, up 1.13%.

Here’s what we know so far about the implications of the trans-Tasman bubble for the ASX listed airports and their share prices.

What it means for the Auckland International and Sydney Airport share prices

The Trans-Tasman Bubble will see Australians and New Zealanders able to travel between the two countries without quarantining on arrival.

It will begin on April 19. Though, New Zealand’s prime minister Jacinda Ardern cautions that travel plans may change at short notice as a result of outbreaks.

Ardern also stated there may be deemed necessary for Australians to receive a COVID-19 test prior to travel to New Zealand and participation in the bubble may vary from state to state. With that said, Queensland is not expected to be participating on 19 April.

Airline input

Qantas Airways Ltd (ASX: QAN) has announced that it and Jetstar will operate up to 122 return flights over 15 routes between Australia and new Zealand per week, beginning on 19 April.

While the airline hasn’t announced how many flights will be taking off or landing at either Sydney Airport or Auckland International, it has stated it will initially be flying only to Auckland. There, Qantas and Jetstar will continue to operate its domestic schedules. There’s a potential that the Auckland International share price may fare better than that of Sydney Airport as there looks to be more flights landing and taking off there. 

Qantas will also launch two new direct routes from Auckland. It will be flying return to Cairns 3 times a week and daily to the Gold Coast. The two new routes are set to launch in time for the June long weekend.

Qantas says these flights will see its operating capacity increase to 83% of what it was before the pandemic. The statistic is good news for both ASX listed airports. 

Air New Zealand (ASX:AIZ) is also flying across the ditch, starting on 19 April. It will be operating 3 to 5 direct flights a day between Sydney and Auckland.

It will also be operating between 17 and 28 return flights from Wellington, Christchurch, and Queenstown to Sydney. Auckland will be receiving Air New Zealand flights from 8 other Australian airports, with between 25 and 31 flights a week landing and taking off from the city.

While it is likely flights to and from Auckland and Sydney will be land in or taking off from one of the two ASX listed airports, it hasn’t yet been confirmed.

Comments from Virgin

Virgin Australia has stated it won’t begin flights to New Zealand until September. Even then it will only fly into Queenstown until late October.

It commented:

While the airline remains committed to Trans-Tasman flying when the market fully recovers, we are mindful of evolving border requirements which add complexity to our business as we push ahead with plans to grow our core domestic Australia operations.

Sydney Airport share price in a nutshell 

The Sydney Airport share price is powering up on the ASX, having climbed 24% higher over the last 12 months. 

Though, even with today’s gains the airports share price is still down 2% year to date. 

It has a market capitalisation of around $16 billion, with 2.7 billion shares outstanding.

Auckland International share price snapshot

The Auckland International share price isn’t travelling as high on the ASX as its Australian counterpart today. It’s doing well in the long haul though. 

It has broke even year to date, and is up 43.78% over the last 12 months. 

Auckland International has a market capitalisation of around $10 billion, with approximately 1.47 billion shares outstanding.