NZ-Australia bubble opens! Qantas (ASX:QAN) shares take off

Pack your bags and dust off those passports, because New Zealand has opened its border to Aussies. Let's fly!

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Two hands holding bubbles containing airplanes, indicating share price movements for ASX travel and airline companies

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New Zealand and Australia have opened a "travel bubble" between the two countries.

The bubble, which opens on the night of 18 April, allows travellers from either side to visit without enduring a 14-day COVID-19 quarantine period.

Since October, New Zealand residents could already travel to Australia in a "one-way bubble". 

But Kiwi prime minister Jacinda Ardern announced on Tuesday afternoon that quarantine requirements would now be scrapped for travellers going the other direction.

"This is an exciting day – the trans-Tasman bubble represents the start of a new chapter in our COVID response and recovery," she said.

"I know families, friends and significant parts of our economy will welcome it, as I know I certainly do."

The first significant re-opening of international travel for Australia has meant that ASX shares related to that activity have gone gangbusters Tuesday.

Qantas Airways Limited (ASX: QAN) was an obvious beneficiary. Its share price shot up 3.14% to close the day at $5.26. 

That's more than double what it was just over a year ago when coronavirus panic struck markets.

Dust off your passports – let's fly!

Qantas International chief Andrew David said travellers on both sides of the Tasman were chomping at the bit.

"We know Australians are keen to head overseas again, so we expect strong demand for flights to New Zealand. And there are many Kiwis who can't wait for a winter escape to warmer weather in Australia."

Qantas had only been operating 3% of pre-COVID capacity between Australia and New Zealand since the pandemic struck. That will be ramped up to 83% as soon as the bubble starts.

In normal times, international tourists outside the two countries account for 20% of the demand for trans-Tasman flights.

The airline and its budget brand Jetstar will start the bubble with 122 return flights each week servicing 15 routes across the Tasman Sea. This equates to about 52,000 per week.

For the first 3 days of the bubble, all seats will be available for Qantas frequent flyers to book as Classic Flight redemptions.

David added that aside from tourism, reconnecting loved ones would be especially satisfying.

"Hopefully, stories of missed weddings and birthdays on either side of the ditch will now be a thing of the past."

Shares for Qantas' counterpart across the ditch, Air New Zealand Limited (ASX: AIZ), did even better Tuesday, soaring more than 8.2%.

Motley Fool contributor Tony Yoo owns shares of Qantas Airways Limited. 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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