RE: Even If28 Dec 2021 05:07
From Interactive Investor.
"But right now, it’s at 147p. And as transatlantic flights to the USA have reopened, this price point could represent great long-term value, especially as many of its competitors have been forced to exit the market.
It’s true that financially, IAG has seen better days. But its Q3 results show glimpses of silver linings. Passenger capacity was 43.4% of Q3 2019, with Q4 capacity planned to be at around 60% of 2019. By summer 2022, it could be flying the same number of passengers as it was pre-pandemic.
And its operating loss halved quarter-over-quarter, while operating cash flow turned positive for the first time since the pandemic began. And with liquidity at €12.1 billion, the company can continue absorbing losses in the short term. However, it does expect a full-year loss of €3 billion for the year. And as remote working becomes the norm, and leisure travellers become wary of being trapped abroad, it could take more time than the company envisions to get back to normal. Of course, if the pandemic fizzles out in 2022, it could benefit from a release of pent-up travel demand".
Personally (and I may be wrong) I see little need for a rights issue, they seem to have cash in the bank or lined up ready. It's a major European based player, the last merger deal was frowned upon by the E.U. competition body, but if others were in danger, as with the banks here, rules could become more "flexible" and hence supportive. BA seems to be something of a cash cow with plenty of slots to the USA so I can't see that being sold off either. Obviously there could be turbulence ahead for a few reasons, but my view is that the worst is behind us.
(NOTE. After selling NWG and LLOY, IAG is a major share holding, average sp about 1.363).
DYOR.