The Air New Zealand Limited (ASX: AIZ) share price has had a stellar month thus far.
Since the start of September, shares in the airliner have soared more than 10%.
Let’s take a look at why the Air New Zealand share price has taken off this month.
Travel sentiment propels Air New Zeeland share price higher
A general shift in sentiment towards future travel has helped push the Air New Zealand share price higher this month.
Fellow airliner, Qantas Airways Limited (ASX: QAN) led the pack in predicting the restart of international travel.
Shares in Air New Zealand were recently buoyed after providing an update on the impact of domestic lockdowns.
The airliner noted that the New Zealand national lockdown and the ongoing suspension of trans-Tasman Quarantine Free Travel (QFT) had impacted its short term financial performance.
According to Air New Zealand, the monthly impact of a nationwide lockdown is approximately NZ$45 million to NZ$55 million.
In addition, the Monthly impact of the suspension of New Zealand to Australia travel is approximately NZ$20 to NZ$25 million.
The airliner noted that the operation of cargo flights is continuing with approximately 50 flights per week.
As a result of the reduced operating cash flow, Air New Zealand also noted that it has begun to draw down on its standby loan facility with remaining funds of NZ$1.065 billion.
How did Air New Zealand perform in FY21?
Shares in Air New Zealand fumbled late last month after the airliner reported a dour result for FY21.
With ongoing border restrictions hampering travel, the company reported a 55% drop in international revenues.
This thematic reflects in the airliners overall performance, with operating revenue down 48% to $2.5 billion for the full year.
Other highlights from Air New Zealand’s report included;
- Net loss after tax of $411 million, a decrease of 34.6% from FY20’s $628 million loss
- Operating cash flow up 40.4% to $323 million
- No interim dividend.
Given the uncertainty of ongoing travel restrictions, Air New Zealand deferred providing an earnings guidance for 2022.
Snapshot of the Air New Zealand share price
Despite a strong recovery this past month, the Air New Zealand share price has struggled to stay in the green this year.
Shares in the airliner are still more than 5% lower since the start of 2021.
At the time of writing, the Air New Zeeland share price has looked to continue its recovery, trading slightly higher at $1.605.
The post Here’s why the Air New Zealand (ASX:AIZ) share price is up 10% in September appeared first on The Motley Fool Australia.
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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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