IAG Shares Continue to Slide – Here’s Why

International Airlines Group shares (LON: IAG) continued their sharp decline last week, down 11.91% on the week to close at 238p.

The stock has now dropped 27% over the past month and is down 20.8% since the start of the year, marking a stark reversal from February’s high of 368p, when airline stocks appeared poised for a strong year.

The latest decline comes amid mounting concerns over the airline industry’s outlook, given macroeconomic pressures. 

Furthermore, analysts have pointed to slowing demand ahead of the peak summer travel season, with economic uncertainty and geopolitical tensions weighing on consumer sentiment. 

Virgin Atlantic’s recent warning about weaker transatlantic demand has only added to the pressure on IAG, which relies heavily on routes between London and North America (primarily New York) for profitability.

Adding to the turbulence, the US administration’s latest tariff measures have heightened fears of an economic slowdown and potential recession in the US. 

Major airlines have seen their share prices tumble as investors worry about the impact on travel demand. 

Bank of America has suggested that macroeconomic stability will be needed before airlines can stage a recovery, while analysts have acknowledged growing uncertainty about when conditions will improve.

IAG’s management now faces a difficult task navigating this challenging environment. With the crucial summer season, TD Cowen's Tom Fitzgerald recently noted the unexpected “clouds everywhere.”