The IAG share price has been under intense pressure for the past few days. The IAG stock has declined nearly 12% in August and more than 15% since the start of September. The stock remains nearly 30% below its highest level this year in March. Nevertheless, it has jumped more than 17% from its lowest point this year. IAG has a total market capitalization of £7.75 billion.
IAG Fundamental Analysis
International Consolidated Airlines Group (LON: IAG) is the parent company of British Airways. Unlike its main competitors, EasyJet and Ryanair which serve tourists, IAG is mostly known for business travel. It is also known for its long-haul flights.
The IAG share price reflects the headwinds faced by the general aviation industry. The resurgence of the coronavirus infections linked to the highly contagious Delta variant has been slowing down most airlines from returning to full capacity. In the second quarter, IAG was operating just 21.9% of 2019 capacity.
However, the company expects to have operated about 45% of passenger capacity between July and September. Taking light of the travel restrictions, capacity would have only increased by 75% by the end of 2021.
While the near-term outlook of the IAG share price remains uncertain, the price is likely to be bullish in the long term. The company seems to have plenty of financial strength to aid it through the crisis. At the end of the June quarter, the company had robust liquidity of €10.2 billion.
IAG Technical Stance
The daily chart shows that the IAG share price has been on a strong bear run for the past few months. It is trading below the 25-day and 50-day exponential moving averages. It is also below the 50-day moving average. Along the way, it has formed a descending channel.
Therefore, the price is likely to remain bearish in the near term amid uncertainties over the Delta outbreak. However, a move above the key resistance level at 178.50p will invalidate this view.