IAG Shares Ready For Liftoff?

IAG (LON: IAG) is the latest airline in the spotlight as it reports its second-quarter results at the end of the week.

IAG’s share price has stagnated over the past few months, but buoyant summer demand for travel and the potential for encouraging results may see its shares takeoff.

The airline group’s first-quarter results beat expectations as it posted its first quarterly profits since the pandemic. The group reported an operating profit of €9m compared to a €741m loss in the prior year. IAG also stated it benefited from stronger yield performance and lower fuel prices as inflation began to ease.

Its outlook told a similar story, with an encouraging summer on the horizon. IAG stated that 80% of Q2 revenue was booked, leading the airline to anticipate a full-year operating profit of between €1.8bn and €2.3bn.

Recent results from easyJet also showcased a recovery in the travel market, with the airline reporting a record pretax profit of £203m as the market faces limited disruptions.

However, IAG shares were recently downgraded at Deutsche Bank to Hold from Buy, with the investment bank “exercising some caution” on European airlines.

Overall, demand trends for IAG look solid, with web traffic to its Vueling website strong and visits to both the British Airways and Iberia sites remaining near highs, according to Semrush. In addition, Google searches for British Airways are up 6% YoY.

By Jamel Boughedda