The lack of travel has become one of the main regrets of humanity since the outbreak of the COVID-19 pandemic. At the same time, some suffered not only emotional distress but also financial losses due to the coronavirus. It is about airlines, the companies whose main income comes from air traffic and passenger movement between countries. Today, we will talk about EasyJet and IAG airline companies as well as their financial state and prospects.

About companies

EasyJet is a British low-cost airline group headquartered at London Luton Airport. It is one of the largest airline companies in Europe. EasyJet was founded in 1995. It initially operated a pair of leased Boeing aircraft. Three years later, the company purchased 15 new aircraft from the same manufacturer. In 1998, EasyJet launched an official website for direct bookings.

The company is listed on the London Stock Exchange (LSE) under the ticker EZJ. Its shares are characterized by minor fluctuations in price, allowing investors to easily determine the trend.

International Airlines Group (IAG) is an Anglo-Spanish multinational airline holding company registered in Madrid and headquartered in London. The company was established in 2011 after a merger agreement between Iberia and British Airways. Because British Airways was the larger company, its shareholders were given 55% of the shares in the new merger.

IAG shares are traded on the London Stock Exchange (LSE) and Bolsas y Mercados Espanoles (BME). It is a constituent of the FTSE 100 Index and IBEX 35 Index.

IAG and EasyJet shares

At the moment of writing, EasyJet shares were trading higher.

You can track changes in quotes and charts of EasyJet and International Airlines Group online on the InstaForex website.

As for preliminary forecasts for both companies, the opening of the transatlantic getaway in September may boost their shares. At the same time, International Airlines Group's further recovery, as well as its share price, will depend greatly on British Airways.

Barclays, one of the most reputable banks in the UK, takes a neutral stance towards the European transportation sector. According to its latest data, the companies show mixed performance. The bank’s analysts believe that despite temporary surges in demand, the airline sector remains at risk.

At the same time, restrictions imposed due to the pandemic have had little effect on the International Airlines Group shares, which positively affects the company. Further growth of the holding will directly depend on the frequency of British Airways international flights. However, amid a decrease in British Airways' capacity, a return to the pre-pandemic level of ticket sales may happen as early as 2024, Bloomberg said. Transatlantic travel and digital safety passports may increase demand for Iberia flights to Spain among the European population.

Unlike IAG, restrictions introduced by UK’s and Ireland’s authorities, prevent EasyJet from recovering and its share price from skyrocketing. Barclays experts believe that the company shows greater performance in continental Europe rather than in the UK. The GBX 500 million payout program, due at the end of 2021, and the balance sheet for the current year are named as the main drivers of the British low-cost carrier.

Deutsche Bank experts suggest that EasyJet will carry around 100 million passengers in the fiscal year to September 2023 versus 96 million in the fiscal year 2019. Germany’s largest bank assumes that EasyJet shares will trade at GBX 1,150.

Meanwhile, JPMorgan is skeptical about EasyJet, backing its forecast by data on the Delta variant of the coronavirus and uncertainty over the capital structure results.

JPMorgan says that high interest rates and high aircraft ownership costs may cover the savings that EasyJet counted on before the start of the COVID-19 pandemic.

Summary

Even though IAG and EasyJet show mixed performance, many analysts are positive about their future. We hope that this analytical review will help you understand the current state of the airline industry better and form your own opinion about IAG’s and EasyJet’s prospects.