Listening to passengers speaking about British Airways, there isn’t a scarcity of complaints. Listening to shareholders in BA’s mother or father firm Worldwide Consolidated Airways Group (LSE: IAG) nonetheless, I’d be shocked to listen to many complaints about current efficiency. It was the greatest performer within the FTSE 100 index final 12 months – and the IAG share price has doubled over the previous 12 months.

Regardless of that, the price-to-earnings (P/E) ratio continues to look comparatively low cost. At 8, not solely does it look fairly modest in absolute phrases, additionally it is properly off its highs over the previous a number of years.

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So, is there room for additional share price progress at IAG – and ought I to speculate?

Issues may get higher from right here

I reckon there may very well be area for the inventory to maneuver up much more.

A key motive for the constructive temper amongst buyers over the previous 12 months is that IAG’s enterprise efficiency has been enhancing. A take a look at the earnings per share demonstrates this.

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Issues usually are not but again to the place they have been in say, 2018, however the route of journey has been constant and constructive.

Income in the meantime, is forward of the place it stood in 2018. So, if the corporate retains a decent rein on prices, that ought to supply a chance for earnings to maneuver even larger.

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Within the first 9 months of final 12 months, web debt fell by round a 3rd. In November the corporate launched a share buyback, which I take as an indication of monetary confidence on the a part of the board (although personally I’d be extra attracted by the cash getting used to pay down debt or enhance the dividend).

Civil aviation demand has been excessive and the corporate has struck a constructive be aware in regards to the outlook for this 12 months with out but stepping into detailed forecasts.

Am I prepared to speculate?

Nevertheless, I’ve some considerations.

One is what IAG’s years of relentless cost-cutting and testing passengers’ loyalty imply for the enterprise over the long run Sure, these days it has been attempting to raise components of the passenger expertise. However I feel that may be a reflection of its realisation that it had more and more misplaced key aggressive benefits as clients questioned why they need to shell out massive cash for airways with little in the way in which of service on many routes.

I additionally see a threat that, when the subsequent massive demand shock comes for civil aviation, it may as soon as once more damage revenues, earnings – and the share price.

From pandemics to terrorist assaults and recessions, such exterior shocks are likely to pop up sometimes and sit outdoors IAG’s management to a big extent (or fully).

So whereas I feel the share price may maintain shifting up, I don’t like the danger profile on the present price and so don’t have any plans to speculate.