frankfurt, hesse/germany - 18 05 18: british airways airplane on ground at frankfurt airport germany

IAG‌ ‌Share‌ ‌Price‌ ‌Forecast‌ ‌as‌ ‌BA‌ ‌Plans‌ ‌Budget‌ ‌Airline‌ ‌

The IAG share price has been in a tight range this week even as risk sentiment in the aviation and travel industry improved. The stock ended the day at 161p which was slightly above this week’s low at 155.66p. 

Aviation companies watch Delta

The aviation sector has had a mixed week. On the one hand, Delta Airlines excited the market when it announced a major order for Airbus A320neo aircrafts. This sent signals that the aviation industry is doing relatively well. At the same time, sentiment in the sector improved after the Food and Drug Administration gave the Pfizer vaccine full authorization. It is expected to do the same with the Moderna vaccine in the coming weeks.

At the same time, the IAG share price is reacting to news that British Airways is considering launching its budget airline as it tries to compete with the likes of EasyJet and Ryanair. 

Such a deal makes sense for British Airways, which is well-known for its long-haul and business class business. This business has been hurt the most during the Covid pandemic. Besides, many countries are still not allowing foreigners and this trend will likely go on for months. 

At the same time, short-haul flights, especially in Europe have almost rebounded as countries reopen. Indeed, a report by the Wall Street Journal showed that the aviation sector has staged an impressive recovery recently. The report said that intra-European flights are down by about 27% compared to the same week in 2020. This is the lowest number it has been since March last year. 

In a recent note, Wizz Air CEO said that the firm was “selling a lot of cheap seats to recover the market very quickly.” The company’s capacity is at 103% from where it was at the same time in 2020.

IAG share price analysis

Turning to the daily chart, we see that the IAG share price has been in an overall downward trend in the past few weeks. Indeed, it is about 28% below the highest level in March this year. At the same time, it has formed a descending channel that is shown in red. Also, the stock remains below the 25-day and 50-day moving averages while the MACD is below the neutral level. 

Therefore, the shares will likely remain in the current range for a while. The key levels to watch will be the resistance at 175p and the support at 150p.

IAG share price