Formally know as International Consolidated airlines Group, the stock price as of recent is struggling and looks to test the COVID low.
Overview
International Airlines Group, (LSE:IAG) is a UK/Spanish conglomerate airline company which hosts an array of many airlines such as, British Airways and Aer Lingus. The company has previously been battered with covid and fluctuating oil prices, that have done significant damage, but has IAG managed to turn itself around from its low points even in the current choppy economic state of all markets?
Financials
IAG has announced its results for the first quarter of 2022, showing an operating loss of €731 million (£625 million). Looking ahead IAG expects to return to profitability from the second quarter of this year, with full-year capacity forecast at 80 per cent of 2019 levels, and North Atlantic capacity expected to be close to 2019 levels by the third quarter of this year. Revenue for Q1 of 2022 reported at €3.4bn however IAG is still operating at a loss of $754m, but with an unprecedented increase in fuel, oil and emissions charges at $918m which has over tripled the costs in 2021 which previously only accounted for $288. It proves to add more to the financial strain on IAG. While the interim resutls don't show the balance sheet on the basis of year end December 2021 total cash on hand at at €7.9bn, the highest ever, with total assets amounting to €34.4bn. Total liabilites sat at €33.56bn leaving them on a very thin margin between being postive and negaitve on thier balance sheet.
Technicals
From a technical aspect, IAG is struggling to find support at any level, previously in March the £1.30 level looked promising with a double bottom causing a rebound to the £1.55 level however since then, with only a culmination of rising oil prices and geopolitical turbulence IAG has fallen way below £1.30 to £1.06 at today’s open. A level not seen since November 2021. A break of £1.06 could take IAG down to 88p per share which is the COVID low. Given the high old prices, staffing crrisis and growing inflationary prssures there is plently of reasoning for the stock to continue lower for now. Tough resistance sits at £1.46 and until the decending triangel pattern is broken, IAG remains negative. MACD & RSI both indicate lower levels are to come before a bouce is possible on the daily/weekly timeframe. As revenue and reports are released going into the later quarters it wil be interesting to observe how IAG deals with the summer period given the staffing crisis, but for the mean time IAG stands bearish.
Summary
Despite the negaitive techncial and financial outlook IAG still remains one of the most popular and most traded stocks on the LSE for good reason, the solid companies it holds like BA that are not just corporations, they symbolise a patriotic view of Britain’s strength and financial state, therefore it is many people best interest to keep them stable, profitable and surviving. As a reuslt of what IAG actually is, the long term outlook can still remain postivie and the current short term issues will eventually be resolved and IAG could become a strong compny in the coming years.
