An Air New Zealand announcement this morning puts its share price in focus today. Here are the details.
The post Why the Air New Zealand (ASX:AIZ) share price is on watch today appeared first on The Motley Fool Australia. –
The Air New Zealand Limited (ASX: AIZ) share price will be one to watch this morning.
This follows the airline operator’s announcement in regards to its international cargo flights.
At yesterday’s market close, Air New Zealand shares finished the day at $1.565.
What did Air New Zealand announce?
The Air New Zealand share price could receive a boost today after the company revealed it would be receiving continued government assistance.
In this morning’s release, Air New Zealand advised it has been awarded a further five months of cargo flights under the New Zealand government’s Maintaining International Air Connectivity (MIAC) scheme.
Introduced in March 2021, the MIAC scheme gives financial assistance to selected airline operators. The funds are used to support the cost of flying, and help keep the country connected to global trade partners.
This is particularly crucial at a time where international borders continue to remain shut due to COVID-19.
The MIAC scheme will run until the end of October 2021.
Air New Zealand has been awarded an average of 30 flights per week across 13 international cities and key Pacific ports.
These include Los Angeles, Hong Kong, Shanghai and other major hub destinations. However, it excludes the trans-Tasman and Rarotonga travel bubbles currently in service.
The total financial support for Air New Zealand over this additional five-month period is estimated to be between $120 million and $145 million.
This brings overall government financial assistance for FY21 to between $320 million and $340 million in cargo revenue.
While the result is an improvement from FY20 levels, the airline still expects to make a significant loss for cargo revenue in FY21.
Air New Zealand share price summary
Over the past 12 months, Air New Zealand shares have jumped more than 20%, however year-to-date performance has fallen 6%.
The company’s shares reached a 52-week high of $1.88 last June before dropping lower in the months ahead.
On valuation grounds, Air New Zealand has a market capitalisation of roughly $1.7 billion, with approximately 1.2 billion shares outstanding.
Learn where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes could be thefive best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.
*Returns as of May 24th 2021