IAG shares tumble as investor optimism fades over lockdown easing

The airline saw its shares slide on Monday, as investor optimism wanes over the easing of lockdown restrictions, with the aviation industry still in turmoil amid the Covid-19 crisis.

International Consolidated Airlines (IAG) saw its shares close 4% lower on Monday, as investor optimism fades over the easing of lockdown restrictions, with the aviation industry still in turmoil amid the Covid-19 crisis.

The company’s CEO Willie Walsh was quick to condemn the UK’s 14-day quarantine plan, speaking about the issue at a transport select committee held by the House of Commons.

Under the quarantine plan, aircraft passengers entering the UK will have to remain in quarantine for two weeks, with Walsh arguing that the strategy will only make things worse for the airline industry.

‘The announcement yesterday of a 14-day [quarantine] period coming into the UK is definitely going to make it worse. There’s nothing positive in anything that I heard the Prime Minister say yesterday,’ Walsh said.

‘We had been planning to resume on a pretty significant basis flying in July. I think we’ll have to review that based on what the Prime Minister said yesterday.’

‘I don’t think anybody believed that the UK government would actually implement it if they were serious about getting the economy moving again,’ he added.

IAG closed at 185p per share on Monday.

Spain calls for common EU response to airline crisis

Nadia Calvino, Spain’s economy minister, has called on the European Union (EU) to help support the airline industry from the economic fallout of the Covid-19 crisis, with the aim of maintaining a ‘level playing field’.

Her remarks were made in a recent interview with Bloomberg, where she said that the EU must look beyond national borders and provide airlines the financial support they need, rather than worrying about competition concerns.

‘The European Commission is keeping a very close eye to make sure there is no breach of the competition rules and that we don't end up with a very unlevel playing field because of the different capacity of government to support the different airlines,’ she said.

‘They are all hit in the same manner. We should provide a European response,’ she added.

How much does it cost to buy UK shares with IG?

There are three ways to ‘buy’ UK shares with IG: spread betting, trading CFDs or buying physical shares. The cost will depend on which method you choose. The table below illustrates how the costs to get exposure to £10,000 of Lloyds stock, which is equivalent to 16,000 shares (quoted at 62.5p a share).

Remember, spread bets and CFDs are derivatives, which come with higher risk and reward than investing.

Cost to get exposure to Lloyds stock

Spread betting CFD trading Share dealing
Action Buy £160 per point Buy 16,000 share CFDs Buy 16,000 shares
Capital required to open £2000 £2000 £10,000
Total fees £20.88 £20.88 £16

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Note: Amounts do not include overnight funding charges and taxes. Spread bets are not subject to tax. CFDs are free from stamp duty, but subject to capital gains tax. Share dealing is subject to both stamp duty and capital gains tax.

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