The Webjet Ltd (ASX: WEB) share price finished the day slightly higher following positive news from the New Zealand government.
The online travel agent's shares ended Thursday's trading session up 0.98% to $5.16.
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New Zealand prepares to reopen international borders
According to ABC News, the New Zealand government will cautiously open its borders from early next year. This means international travellers will be able to visit New Zealand for both tourist and business purposes.
It could spell good news for the Webjet share price as the country has been closed off since March 2020 when COVID-19 swept the world into lockdown.
To help maintain the outstanding success in beating the virus, authorities will delay the second jab of the Pfizer vaccine. This is in order to speed up the administration of first doses. The wait time for the second jab will increase from 3 weeks to 6 weeks.
The plan is to allow fully-vaccinated travellers from low-risk countries to visit quarantine-free. For passengers who are arriving from medium-risk countries, they will need to conduct some form of quarantine. And lastly, for travellers coming from high-risk countries or who are unvaccinated, a 14-day hotel quarantine would be mandatory.
The New Zealand government is yet to release where each country is ranked on the list.
A new trial is expected to run in October, allowing some business travellers to quarantine at home rather than hotels. If successful, the country will implement this system for medium-risk countries next year.
This is likely to have a positive effect on the Webjet share price. The airline has been in hibernation mode since early last year. However, it still has substantial cash reserves to survive the ongoing crisis that has put the travel industry in a tailspin.
At its most recent update on 19 May, Webjet revealed a strong capital position. Pro forma cash stood at $431 million, with an average cash burn rate of around $5.5 million per month. This provides the company a long runway of running its business without the need to raise additional capital or draw on debt.
Webjet share price summary
Over the past 12 months, Webjet shares have jumped by more than 50% since hitting near COVID-19 lows. The company has gradually been moving on an upwards trend, but is still a fair way off from 2019 levels.
Webjet has a market capitalisation of around $1.95 billion, with approximately 379 million shares outstanding.
