Blows to travel roil airport

Shares frozen as US’ Euro ban lands on top of market pain

Auckland International Airport and Tourism Holdings are scrambling to count the cost of repeated blows to the travel industry caused by the Covid-19 pandemic.

The airport company’s shares were placed in a trading halt late yesterday while it works out what a ban on travel from Europe to the US means for its business.

The company’s shares were down 8.1 per cent at $7.73 when the trading halt was requested at 4pm. Like other travel-focused businesses, its shares have been under the pump as investors shy from firms exposed to the Covid-19 outbreak. The stock has dropped almost 19 per cent this year.

The World Health Organisation formally declared the outbreak to be a pandemic yesterday, sparking another sell-off on equity markets around the world.

And that took another turn later in the day, when US President Donald Trump announced a 30-day travel ban from Europe to the US, starting Friday, US time. The restriction excludes Britain.

“There have been a number of significant events today in the global market. Auckland Airport is assessing the impact, and we will be issuing new market guidance in due course,” a spokeswoman said.

Last month, the airport operator cut its annual earnings guidance by $5 million because of the virus outbreak, forecasting underlying profit of $260m to $270m.

New Zealand has bans on foreign nationals entering the country from or through Iran and China, and requires travellers from Italy and South Korea to isolate themselves for 14 days.

Air New Zealand has shrunk its total capacity by a tenth since the outbreak as it contends with fewer passengers.

The airline dropped its earnings forecast and is tightening its belt further to deal with the reduced demand.

Its shares were down 4.4 per cent at $1.81 today, and are down 37 per cent since the start of the year.

Tourism Holdings, which has a large recreational vehicle operation in the US, says it is also assessing the impact of the suspension.

The company said it will provide an update on the impact and potential mitigations of this suspension on its financial year 2020 net profit expectations, once this assessment is completed.

Before this event, Tourism Holdings’ expectations for full-year profit remained at around $24m.

An update is expected to be provided by the end of trade today.

— Additional reporting BusinessDesk