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The airline sector has been hard hit by the crisis, but while Air France and Lufthansa are still struggling, International Airlines Group (IAG) — the holding company for the merged British Airways and Iberia — could be cruising towards clearer skies, Arnaud Scarpaci, fund manager at Agilis Gestion, told CNBC.
High oil prices , which have long impacted the sector negatively, have lost $20 over the last month, relieving the company of a great burden.
But it's the media speculation that IAG could merge with Portuguese airline TAP that could lead the company’s share price up, Scarpaci said.
“TAP could be interestedas it is in difficulty right now … it is looking at the International Monetary Fund for cash,” Scarpaci explained. “This would allow the company to develop cheap liaisons towards South America, especially in Chile and Brazil.”
Compared to other airlines, IAG shares “are among the cheapest ones, with a price-to-earnings ratio of 5.72,” Scarpaci said, “and its PEG ratio [the ratio between a company’s P/E ratio and its annual earnings per share growth] is above 1, which is very positive,” he added.
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