Key Points

• The IAG share price is up nearly 16% year-to-date.
• Travel restrictions have been laxed worldwide.
• IAG has major airlines in its portfolio.

Just like the aviation sector, the International Consolidated Airlines Group (LSE:IAG) share price has gone through torrid times. For an industry that survives by transporting people around the world, the impact of the Covid-19 pandemic has been everything but mild.

Since the emergence of the Coronavirus, different cities around the world have placed different levels of travel restrictions to curb the spread of the infection. As a result, IAG shares are down over 60% since the start of the Covid-19. But since the start of 2022, they’re actually up by 16%. So can this upward trajectory continue throughout 2022? Let’s explore.

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The airline portfolio of International Consolidated Airlines

IAG comprises a group of leading airline companies that operate in the UK, Ireland, Spain and other countries as well. The subsidiaries operating under the IAG brand maintain their separate identity yet collaborate to drive synergies and maximise performance.

This structure enables the business to make objective, flexible decisions with a long-term view in mind. For the companies within the group, they are allowed to focus their efforts on their target customers and utilise their competitive advantage.

British Airways and Iberia are full-service carriers, Aer Lingus and Iberia Express are value carriers, while Level and Vueling are low-cost carriers. Beyond these, IAG also has the following companies in its portfolio, including IAG Loyalty, IAG Cargo, IAG Global Business Services, IAG Tech and IAG Connect.

As business returns to normal and international travel returns to pre-pandemic levels, revenue and profit could recover as well. So, I’m not surprised to see the IAG share price on the rise recently.

What could happen to the IAG share price?

Various factors affect the movement of a stock price. These factors could be broadly categorised into fundamental, technical and market sentiments. While the other factors are important to me, I pay more attention to the fundamental factors.

I follow Warren Buffett’s advice, “If a business does well, the stock eventually follows”. That being said, I am quite positive that the IAG share price will begin skyrocketing soon. Already, the company has reported improvements in airline usage as travel restrictions are rolled back. If this continues and business returns to pre-pandemic levels, the IAG shares will surge. At least, that is what I think.

Notwithstanding, the post-covid environment may be an entirely different one. As many companies have found better ways of doing business remotely, the need for international business travel could decline. If that happens, aviation companies such as IAG will have to find a way of replacing this lost income.

With that in mind, I think revenue may not easily return to the pre-pandemic level quickly. Personally, I’m waiting until the firm releases its Q4 and FY2021 results later in February. I will not be surprised to see the earning and revenue results being the catalyst for the IAG share price directions.

Wrapping up

The IAG share price is up about 16% year to date. It is only time that will tell how far it could go this year. In any case, if no other mutation of Covid-19 disrupts activities, the stock could skyrocket. But it’s not the only business to profit from loosening travel restrictions.

Learn more about IAG…

• Are IAG shares a good investment? Here’s what I think
• Can easing travel restrictions boost the IAG share price?

Prosper Ambaka does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned. Views expressed on the companies and assets mentioned in this article are those of the writer and therefore may differ from the opinions of analysts in The Money Cog Premium services.