What does the travel bubble mean for our economy - and our airline?

Author
Newstalk ZB,
Publish Date
Tue, 13 Apr 2021, 7:45PM
(Photo / NZ Herald)
(Photo / NZ Herald)

What does the travel bubble mean for our economy - and our airline?

Author
Newstalk ZB,
Publish Date
Tue, 13 Apr 2021, 7:45PM

The travel bubble is a much bigger deal for our economy.

Two way, quarantine free travel between here and Australia starts next Monday.

HSBC Chief Economist Paul Bloxham told Heather du Plessis-Allan it's going to be a key support for growth in New Zealand.

"Australians normally spend about AU$60 billion on international travel every year, and if they took about 10 per cent and pushed it over to New Zealand, that would be about 1.5 percent of your GDP, which is a pretty hefty amount."

Two companies that are relying on the bubble playing out are Air New Zealand and Auckland Airport. 

Jarden's Adrian Allbon told Heather du Plessis-Allan Air New Zealand's stock might be overvalued. 

"In the way we think about the stock, we believe that the company still needs to go through a major recapitalisation and raise equity of the order around the 1.2 billion mark."

He says the market is missing the dilutionary impact of that. 

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