IAG shares remain bearish, but will BA's Gatwick departure help?

• IAG share price down 2.4% as markets open
• Ongoing restrictions force travel industry to react
• Could British Airways save IAG shares with Gatwick departure?
• Ready to trade the IAG share price? Open an account today

Shares in International Consolidated Airlines Group opened at 196p on 21 June. That’s down 2.4% on 18 June’s 201p opening price. The recent drop is indicative of the way IAG shares have moved throughout June. The final stages of unlocking across the UK have been postponed by at least two weeks and, more likely, four weeks due to concerns over rising Covid-19 infection rates. These delays have caused further unrest and uncertainty within the travel industry.

How is the travel industry reacting to ongoing restrictions?

800+ employees from British Airways, easyJet, Virgin Atlantic, and TUI will protest in London on 23 June. Branded as the Travel Day of Action, the public display of discontent is designed to raise awareness of the financial impact continued Covid-19 restrictions are having on the aviation sector. The trajectory of IAG’s share price reflects these troubles. From a peak of 216p in March and April, when many expected a summer of international travel, IAG shares are trading 9.2% lower this week.

The impact of current restrictions has forced IAG’s British Airways (BA) to re-evaluate its position at Gatwick Airport. A report by The Telegraph over the weekend noted that BA bosses are weighing up their options. A current waiver on slot usage has allowed BA to avoid any penalties for not launching flights from Gatwick over the last 18 months. However, with that waiver set to expire at the end of 2021, decisions have to be made. As such, recent media reports suggest that BA will leave Gatwick to consolidate operations at Heathrow.

Are passenger numbers hurting the IAG share price?

Passenger numbers for the first week of June are 92% lower than in 2019. BA bosses are looking for ways to address this shortfall and cutting ties with Gatwick could be the best option. That could help the IAG share price find some stability in the coming months. It’s also been announced that BA will launch 18 new flights per week from smaller UK airports, including Newquay, Exeter, Belfast City, and Glasgow. The other potential positive for BA and, therefore, IAG shares is an impending relaxation of travel restrictions.

Justice Secretary Robert Buckland told the BBC that fully vaccinated individuals may not need to self-isolate on their return from amber-listed countries. Although nothing has been confirmed, this change may make international travel more accessible for Brits by the end of July. This could provide another boost for IAG shares. However, with the company shouldering a ‘huge amount of debt’, issues over flight refunds, and a full return to normality unlikely this summer, the IAG share price may remain changeable for some time.

Can IAG shares recover this summer?

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