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More gloom from the Daily Wail:
"BA cancels string of transatlantic flights due to coronavirus: London to US routes are reduced due to lack of demand and short-haul flights drastically cut back threatening Easter holidays"
https://www.dailymail.co.uk/news/article-8066461/BA-cancels-string-transatlantic-flights-coronavirus.html
While other shares may be stabilizing, I think IAG still has some way to fall. I will probably set my buy limit somewhere between 300p and 350p. I think they can pretty much say goodbye to any profit for 2020. In the long-term, I think they will be fine.
vred, it appears IAG has hit some bad turbulence with the Coronavirus. I was seriously considering buying some more today when it dipped below 420p but decided to wait and see whether the virus is likely to be brought under control or whether a global pandemic is likely.
Now isn't a good time to be holding airline shares or holiday/cruise shares. I had SAGA shares, but sold at a small profit to buy IAG just before they plummeted from over 40p to low 30s. It's a case of whether to average down with IAG or buy back into SAGA. I cannot really see why SAGA has fallen so much - they do cruises for the over 50s as part of their business, but selling insurance still makes up a good proportion of their revenue and they have been making cost savings. They have big loans to pay for their shiny new ships, but their new ships are bigger and more efficient than their old vessels. They are almost 100% booked for cruises over this summer and passengers would lose the majority of their money if they cancelled their bookings now.
The IAG price is now virtually at the same price I bought at in August 2019 - bought at 437p and sold for 648p in January 2020. That was around 45% profit in under 6 months. It could be a case of Deja Vu - if the Coronavirus is brought under the control in the next month without significant flight restrictions between Europe and the USA, I wouldn't be surprised if IAG is back up and approaching 700p by Christmas. If we end up in a global pandemic then the share price will be kept low - how low will depend on the amount of flight cancellations that happen over the coming months...
I'll be boarding at anything under 400p and then buy more Seats during the flight itself.
Numbers. How is the scenic route looking?
Talatum
If it does drop that low, it will only be a temporary phenomenon. Better to think long-term.
I visit IAG board but posting for the first time.
RogueRiver, I hope it does not go back to 400 . I do expect some further drop and have left room to average down. Also hoping declaration of dividend might help stabilise the price though 19% tax charge does negate benefit for some PIs.
The virus (or rather the hysteria over something that is only going to kill those who might have been killed by any type of flu) is probably going to hit international travel for the rest of the year. After that, a vaccine will probably be available. Meanwhile, I wouldn't be surprised to see the SP back in the low 400s.
Financial hit from the strike action was already baked in into the SP...so it's not going to be a shock. It's the 'shocks' that typically drive a SP down. Covid.19 is a total unknown at this stage, this is what the markets don't like. I would not be surprised if the airlines drop an additional 10% or so over the next 2 weeks. All it takes is for any particular airline to inform the markets of what they consider the revenue or profitability hit could be, unlikely to be good news. If not, just watch the particular airlines SP dive. I'm staying out of the airlines for a while until there is some sense of where the potential impact of Covid.19 is going.
I doubt the results on 28 Feb will be particularly stellar anyway. BA took a huge hit from the strike action.
I'd suggest as impact of Covid.19 is yet to be fully understood - there is a very high probability all airline share prices will continue heading south. Too many unknowns at this stage and the news realises over the past few days are not positive. Hard to see where a change in direction will come from. IAG results are due 28th Feb - but it doesn't matter how good they may be (as results are based on past performance). Longer term impact of Covid.19 is spooking the markets and on the balance of probability - I can see IAG along with other airlines SP's continuing to drop over the next week or so....or until better news comes out.
IAG struggled to reach 650 without Covid19, how on earth will it hit 700 with?!
Going to 700p via the scenic route. I've just bought in at just under 580p.
Qatar increases its stake in BA-owner IAG to 25.1%