Hobson: How Did BA Shares Avoid Disaster?

THE WEEK: Morningstar columnist Rodney Hobson questions how British Airways operator IAG avoided a mauling on the stock market

Rodney Hobson 2 June, 2017 | 12:11PM

Those who wonder how increasingly heavy aircraft can defy gravity now have a greater conundrum to consider: How on earth did shares in International Consolidated Airlines (IAG) avoid dropping out of the skies after the disastrous bank holiday weekend for British Airways?

I cannot see any good reason to buy

It’s not just the substantial compensation claims, variously estimated at up to £150 million, plus the cost of processing them. It’s not just the one-off cost of untangling all the aircraft to get them back in the right places, a feat that not surprisingly took several days.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
easyJet PLC783.61 GBX6.93
International Consolidated Airlines Group SA164.00 GBX3.90
Ryanair Holdings PLC15.50 EUR-0.32

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.

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