IAG, easyJet erase gains despite positive travel developments
Stock prices of both airlines experienced a sharp correction on Wednesday, after having rallied strongly at the start of the week on the easing of quarantine requirements for travellers.
- IAG (LON: IAG) share price falls over 3% to an intraday low of £180.60 on Wednesday (07 July 2021)
- easyJet PLC also lowered 3.4% to £903
- Both stocks rallied over 5% earlier this week, after the UK government announced plans to remove quarantine requirements for double-jabbed passengers entering the UK from ‘amber list countries’
- IAG-owned British Airways, Virgin Atlantic and Heathrow Airport then announced that they will participate in a ‘proving trial’ that will allow inbound travellers to prove their vaccination status digitally
- Interested to trade IAG or easyJet shares? Open an account with us today to get started.
Airlines' stock prices: What’s the latest?
Shares of IAG and easyJet have nearly erased all the gains made at the start of the week, when UK Prime Minister Boris Johnson first confirmed that fully vaccinated travellers will not have to quarantine upon returning from amber list countries.
On Monday (05 July), Johnson said during a press conference that while the government was working toward easing travel measures, an amber list of countries most impacted by the pandemic will remain in effect.
However, with vaccine efficacies more certain based on recent studies, authorities ‘will work with the travel industry towards removing the need for fully vaccinated arrivals to isolate on return from an amber country’, he added.
This means that residents travelling to popular destinations like Spain, France and Italy will not have to self-isolate at home for ten days upon returning.
British Airways, Virgin Atlantic and Heathrow start ‘proving trial’
Following that, IAG-owned British Airways, alongside Virgin Atlantic and Heathrow Airport on Wednesday announced that they will participate in a ‘proving trial’ to prove that it is ‘possible to quickly and easily verify those arriving into the UK who are fully vaccinated’.
This will be done via an identification process already in place for outbound travel to several countries using various internationally recognised vaccination digital credentials, including the NHS app, CDC card, US state-level digital certification and EU Digital Covid Credential.
The initiative will see fully vaccinated inbound volunteers travelling on selected flights from Athens, Los Angeles, Montego Bay and New York to London Heathrow showing proof of their vaccine status.
‘The trial aims to reassure (the) government that airlines and airports can check vaccine status upstream and away from the border, ensuring no further pressure in UK immigration halls,’ the three companies said in a press release.
In related news, Germany on Tuesday became the latest country to confirm that it would accept fully vaccinated UK travellers without having to be quarantined.
How do analysts view IAG and easyJet?
Despite the string of positive developments, IAG and easyJet’s share prices were unable to sustain their upward momentum, with both stocks declining nearly 3% respectively on Wednesday.
The latest analyst sentiments published by MarketBeat show a consensus rating of ‘buy’ and price target of £222.31 on the IAG stock. The price target represents a 22.5% upside potential from the counter’s last traded price of £181.42.
Credit Suisse analysts, who posted an investment thesis earlier in the day, raised their price target to a more bullish £256 from £228 previously, while keeping a ‘buy’ call on the IAG stock.
Meanwhile, of the 17 analysts polled regarding easyJet, 8 have rated it a ‘hold’ with 7 calling it a ‘buy’ and 2 on ‘sell’. Despite the mixed sentiments, the stock still has a consensus price target of £964.31, which equates to a 7% upside potential from its current price of £902.80.
UBS Group, the latest to rate the stock, has set a price target of £1,125 on easyJet shares.
How to trade IAG, easyJet shares
You can take a position on IAG shares for just a small initial deposit with Contracts for Differences (CFDs).
CFDs give you direct market access (DMA), providing increased transparency useful for more advanced traders.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
