Friday, January 21

IAG tiptoes over Ryanair’s profit warning

IAG shares bounced nearly 5 percent off the IBEX 35 and dodged the bad news it brought Ryanair on Wednesday. The low-cost company will lose more money this year to omicron.

The profit warning from the irish group reflects the uncertainties still facing the airline industry. For Ryanair they will translate into losses of between 250 and 450 million in its fiscal year, compared to its initial estimate of 200 million red numbers.

“The omicron variant and recent government restrictions on travel in Europe notably weakened Christmas and New Year bookings,” Ryanair lamented. In fact, the group reduced its capacity for January by 33 percent.

The low cost added that the recent ban to fly from the United Kingdom a France Y Germany had a particularly negative impact on their expectations of demand, as did the suspension of the flights of the European Union to and from Morocco.

IAG, immunized against Ryanair’s profit warning

With all the worrying that this news is for the sector, IAG continued to accelerate the bullish rally. Ryanair’s lower profit notice hardly took its toll.

First, Iberia’s parent is much less dependent on European traffic than the Irish group.

Its great catalyst is transatlantic flights with the United States. For this reason, the decision of the Administration Biden Fighting omicron without enacting new restrictions works in their favor.

Routes with the United States are much more profitable for British Airways, by concentrating more business trips, whose profit margins are higher.

In fact, the large flag airlines are the most benefited by this circumstance compared to the low cost, as shown by the increases of around 3 percent of Lufthansa Y Air France KLM.

Likewise, in the presentation of results for the third quarter, IAG already went through the trouble of having to announce losses for this year of around 3,000 million, with which the bad news has already been discounted, which was not the case with Ryanair.

The airline industry celebrates that omicron is less severe

On the other hand, investors bet seamlessly on the tourism sector after disseminating several studies that clearly point to a lower severity of the omicron variant.

Thus, a group of researchers from Institute of Public Health from Scotland He said omicron is associated with a two-thirds lower risk of hospitalization compared to the delta variant.

In another report, a team of scientists from the Imperial College from London found that people with omicrons were almost half as likely to have to be hospitalized.

The data adds to a study showing that South Africans were 70 percent less likely to develop a serious illness and 80 percent less likely to be hospitalized if they contracted the new variant.

All this scientific evidence was very well received by the market, insofar as it shows that omicron, although it is much more contagious, is also less dangerous than delta, at least in countries with high levels of immunity.

IAG targets a minimum bounce of 15 percent

El profit warning que Ryanair revealed early in the morning, he caught IAG in the middle of a comeback, after shaking the value of the bearish yoke, as reported Now the prospects are much brighter.

“It has broken the important resistance it had at 1.72 euros, and this is key because it is the area through which a clavicular line of a double-bottom pattern passes,” said the magazine’s director of analysis. INVESTMENT and from, Josep Codina.

Now, what would remain to validate the bullish turn and end the corrective process is to close the gap left by the price, which should leave the price close to the 1.8 euro area.

The theoretical objective of this double bottom pattern is around 1.95-2 euros ”, he said. Codina. So far there is a 15 percent bullish margin.

The 2 euro is an important psychological level, but higher, at the 2.06 benchmark, the 200-session moving average is even more important.

Here, the quote for IAG It would be coinciding with another zone of greater resistance, between 2.10 and 2.22.

If it surpasses this area, “it will form a much more significant higher return pattern, which should allow the attack to annual highs of 2.5 euros,” he added. Codina.