IAG stock price collapses 9% as the clash between British Airways and its unions intensifies
- The row between IAG’s British Airways and its unions deepens
- Unite union, which represents BA cabin crew, has contacted the EU to oppose IAG’s acquisition of Air Europa
- Shares of IAG plunge nearly 9%, now down 20% on the week
Shares of International Consolidated Airlines Group (LSE: IAG), the parent company of British Airways (BA), plunged 9% today as the row between the BA and its unions has deepened over the past few days.
Fundamental analysis: Unions to approach the EU
The Unite union, which represents BA cabin crew, says it has contacted the European Union to register its resistance to IAG’s acquisition of Air Europa. In November last year, Iberia, another subsidiary of IAG, agreed to a deal to purchase Air Europa for 1 billion euros.
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“Unite is questioning why IAG is seeking to fire and rehire the workforce at BA while its parent IAG is ploughing ahead with buying an airline for over 1 billion euros ($1.1 billion),” Unite Executive Officer Sharon Graham said in a statement.
Unite is asking how it is possible to spend a billion euros on buying new airlines, while on the other hand, the company is firing staff to cut costs as the coronavirus pandemic is currently wreaking havoc across the global aviation industry.
However, the IAG’s CEO Willie Walsh said that they’re evaluating the purchase of Air Europa. Media reports circulated in April that IAG is seeking to lower the agreed price.
“The acquisition will be made by Iberia… not a single penny of British Airways money will go towards that acquisition… If the Iberia/Air Europa merger goes ahead, it’s not going to in any way impact on the people at British Airways,” said Walsh.
IAG said last month that it made an operating loss (pre-exceptional) of £473 million as compared to £119 million profit in the same quarter last year. As a result, BA had to furlough 12,000 staff, which is 25% of its total workforce.
Technical analysis: Massive bearish candle
Shares of IAG plunged nearly 9% today as a result of the deepening row between the British Airways and the Unite union. This way, weekly losses have not accumulated to almost 20%, creating a massive bearish candle on the chart.
In May, IAG stock price dipped below the 160.00 mark for the first time since 2012. The price action has recovered to 360.00 in the meantime, however, this week’s developments have now pushed the price below the 300.00 handle again.
International Consolidated Airlines Group stock price plunged almost 9% on Thursday after the clash between its subsidiary British Airways and its unions intensified.
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