IAG share price pulled back sharply this week as investors remained concerned about the company’s growth. The stock crashed to a low of 106.74p, which was the lowest level since July 14th of this year. It has fallen by over 15% from the highest point this month and by 52% from its highest level in 2021.
IAG is a leading British company that owns several airlines like British Airways and Iberia. Like other airlines, the company has seen a sharp uptick in demand in the past few months as all countries have reopened.
However, the company is still facing significant challenges that emerged from the pandemic. For example, it has a severe staff shortage and jet fuel prices remain substantially higher than where they were before the pandemic.
In a statement this week, the company said that it planned to cut about 10,000 flights from its winter schedule. These cuts amount to about 8% of all flight schedules between October and March. As a result, analysts expect that the industry will take between 12 to 18 months to go back to where it was before the pandemic fully.
By cancelling these flights early, British Airways hopes to avoid the chaos that happened in early summer. Another reason for the cancellation is Heathrow Airport’s cap on passenger numbers. The airport has extended the cap to the end of October.
Therefore, the IAG share price has dropped sharply as investors worry about the company’s growth and potential loss for the year.
The daily chart shows that the IAG stock price has been in a strong bearish trend in the past few months. In this period, the stock formed a descending channel that is shown in black. The stock has dropped below the 25-day, and 50-day moving averages and formed a small double-top pattern at 125.7p.
Therefore, the IAG share price outlook is bearish, with the next key support to watch being at the lower side of the channel at about 95p. However, a move above the resistance at 112p will invalidate the bearish view.
This post was last modified on %s = human-readable time difference 08:53