International Consolidated Airlines Group (LSE: IAG) has been on a bumpy ride since the onset of the coronavirus pandemic. At the time of writing, the IAG share price was trading 2.10% lower at 156.46p. Its total market capitalization currently stands at £7.78 billion.
The resurgence of the coronavirus infections linked to the Delta variant saw the IAG share price slip more than 29% below its highest level this year. The Anglo Spanish multinational airline holding company has been struggling to rebound from its losses.
The company has been trading nearly 20% higher from its lowest level this year. However, the company is still under pressure, despite signs of the world returning to normality.
Long haul travel has been facing headwinds on its sail to recovery. According to IAG’s interim results produced last month, its passenger capacity in the second quarter was 21.9% of 2019. However, the airline’s management hopes to increase its current passenger capacity for Q3 to around 45% of 2019.
The company has also boosted the number of cargo flights to make up for the losses in passenger revenue. Still, the board is unable to provide profit guidance for 2021 due to the uncertainty of the Covid-19 virus.
According to the company’s report for the second quarter, IAG is not at risk of running out of cash any time soon. The company reported strong liquidity of €10.2 billion at the end of the second quarter. Most analysts have termed the stock a buy.
IAG Technical Analysis
The daily chart indicates that the IAG share price has been trading in a bearish descending channel for the past 5 months. It hit an intraday high of 160.90p before pulling back.
The IAG share price has been trading below the 50, 100, and 200-day moving averages, reinforcing its negative momentum. The 50 and 200 DMAs have formed a death cross, hinting at further weakness.
Therefore, the company’s shares are expected to continue with their bearish outlook. On the flip side, a move above the 200 DMA at 178.50p will invalidate this view.