Despite the summer months the airline sector has not managed to get back on track

September 01, 2021 14:33

Today we start September after a summer of continued vaccination rollouts in Europe and the gradual improvement of mobility between European countries. This relaxation of travel restrictions has caused an increase in tourism and, with it, the number of flights. However, the number of flights operating remains far lower than pre-pandemic levels.

Despite this reopening, the airline sector has not managed to get back on track. This is largely due to the outbreak of the Delta variant and its rapid spread - which is inflicting damage on the tourism sector due to the reduced effectiveness of current vaccines against this variant.

At the moment, although obstacles remain ahead, the future prospects of this sector are fairly positive as the evolution of the pandemic continues to improve and the results of these companies also begin to improve little by little as the number of flights increase.

Below is the weekly chart for popular Norwegian airline "Norwegian Air Shuttle". For several years it has maintained a strong downward trend, falling more than 97% over the past year due to both the pandemic and problems derived from the purchase of a series of aircraft in 2012 from Airbus.

Depicted: Admirals MetaTrader 5 – Norwegian Air Shuttle Weekly Chart. Date Range: 13 April 2008 – 1 September 2021. Date Captured: 1 September 2021. Past performance is not a reliable indicator of future results.

Five year evolution of share price:

  • 2020: -97.70%
  • 2019: -62.16%
  • 2018: -1.12%
  • 2017: -38.68%
  • 2016: -11.34%

This decline meant the company had to carry out a deep restructuring and also received much needed aid from the Norwegian state which provided some relief.

Yesterday, the company reported that during the first half of the year it obtained a net profit of 155 million euros despite the fact that its main European routes remain affected by the pandemic. Despite this, the company expects that during the second half of the year the rebound in travel will continue and its current fleet will be fully utilised by the end of the year.

However, during today's session, we learned that the Swedish airline "Scandinavian Airlines Systems (SAS)" has reported a net loss of 573 million euros in the first 9 months of its fiscal year (which begins in November).

Furthermore, on Monday, the European Union agreed to reimpose restrictions on transatlantic flights to the United States due to the increase in coronavirus infections. This decision caused widespread falls in the sector, the main recipient of which was the Spanish-British conglomerate IAG that includes Iberia and British Airways.

As in the case of Norwegian, if we look at the weekly chart, IAG suffered a sharp decline caused by the pandemic. However, after marking historical lows towards the end of last year, the IAG share price has been gradually climbing, confirming the positive divergence in its MACD indicator. Unfortunately, however, the summer has not been positive. Since June, IAG has fallen 21.5% in the stock market.

Depicted: Admirals MetaTrader 5 – IAG Weekly Chart. Date Range: 11 January 2015 – 1 September 2021. Date Captured: 1 September 2021. Past performance is not a reliable indicator of future results.

If we look at the daily chart, we can see how this company has lost the important level of support/resistance represented by the green line, thus continuing the downward trend started at the annual highs.

It is important that the price maintains its current support level at 155 GBX, as the loss of this level could open the doors to a major correction until the next support level in the red stripe.

Depicted: Admirals MetaTrader 5 – IAG Daily Chart. Date Range: 20 April 2020 – 1 September 2021. Date Captured: 1 September 2021. Past performance is not a reliable indicator of future results.

Five year evolution of share price:

  • 2020: -61.40%
  • 2019: 1.20%
  • 2018: -5.07%
  • 2017: 47.65%
  • 2016: -27.78%

Trade Stock CFDs With Admirals

With a Trade.MT5 account from Admirals, you can trade Contracts for Difference (CFDs) on IAG and over 3,000 other shares! CFDs allow traders to attempt to profit from both rising and falling prices as well as benefiting from the use of leverage! Click on the banner below to open an account today:


The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets trademark (hereinafter “Admiral Markets”) Before making any investment decisions please pay close attention to the following: 

  1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
  3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  4. The Analysis is prepared by an independent analyst Roberto Rojas, Freelance Contributor (hereinafter "Author") based on personal estimations.
  5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis.
  6. Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  7. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.
Roberto Rojas
Roberto Rojas Financial Analyst, Admirals Spain

Roberto is a Financial Analyst with a European Financial Advisor certificate and a Double Degree in Business Administration and in Actuarial and Financial Sciences. In 2013 was graduated as an Expert Manager in Equities