Key points:
- The IAG share price has fallen 8.91% over the past month.
- However, the airline group has made several positive announcements.
- So, should you buy IAG shares? Read on to find out.
The International Consolidated Airlines Grp SA (LON: IAG) share price has fallen 8.19% in the past month despite the company making several positive announcements, including that all its airlines would be profitable by the end of the year.
Despite the positive developments, investors remain bearish about the airline industry, which explains the decline in IAG’s share price. The company operates British Airlines and Iberia, the UK and Spanish flag carriers and other smaller airlines, including Aer Lingus and Vueling.
Also read: Best Airline Stocks To Buy In 2022.
The airline group is set to benefit from lifting the passenger cap imposed by Heathrow Airport, which could increase the number of flights it operates out of the airport, resulting in a boost to its revenues.
IAG expects to generate more revenues from opening other key markets, such as Japan and China. In addition, the 2022 World Cup in Qatar could also be another significant revenue driver for the airline as people travel to watch the global football competition that happens once every four years.
However, all is not rosy for IAG since the airline is facing a potential increase in its operating costs triggered by higher oil prices after OPEC+ cut their production target to boost oil prices. Higher oil prices will eat into IAG’s profits and could hinder its drive towards profitability.
IAG has called for an extraordinary meeting of its shareholders to approve the purchase of 50 Boeing 737 family aircraft and 37 Airbus A320neo family aircraft. The airline group hopes to get shareholder approval for the purchases as it looks to modernise and grow its aircraft fleet.
The airline group’s British Airways carrier had announced plans to cut as many as 10,000 flights during the winter season, but lifting the cap on passenger numbers at Heathrow Airport could help reduce the number of cancelled flights.
IAG shares have fallen below the crucial £1 level and were trading at 99.66p at writing. I would wait for a strong rally above this level before buying IAG shares, which traded as low as 90.95p last week.
*This is not investment advice.
IAG share price.
The IAG share price has fallen 8.19% in the past month despite a slew of positive news. Can it recover?