International consolidated airlines (LSE: IAG) Actions were a star over the past month. At 335.3 pens per share, FTSE 100 The group of airlines has increased the impressive 19% value since May 5.

However, despite these forceful profits, the price of IAG shares still looks (at least on paper) like one of the best British occasions.

Based on this year’s expected profits, the owner of British Airways trades in a price -profit (p/e) price (p/e) 6.1 times. The quick pace of the expected growth means that it also deals with the multiple of P/E (PEG) forecasting 0.5.

All reading below means that the actions are underestimated.

However, the owner of British Airways is also in the face of a solemn risk that some may say that he justifies this low valuation.

So what is the verdict? Should I buy a recreational giant for my portfolio?

Healthy conditions

While some main carriers have recently survived commercial turbulence, the wider aviation industry definitely was despite the growing economic uncertainty, causing an boost in shares such as IAG.

Revenues at Footies increased by estimating 9.6% in the last quarter, announced in May. Several of his rivals also reported further trade in recent months, from a transatlantic competitor Air France-Klm to a European budget specialist Easyjet.

However, resistant demand is not the only thing that drives the price of IAG Skywards. Profits were supported by falling oil prices based on the signs of the superior market and reducing demand.

The cost of the company’s fuel on the available kilometer of seating (ASK) dropped by 7.1% in the first quarter.

Is a storm coming?

Many analysts tilt the further weakening of oil prices when the global economy cools. However, subdued economic conditions are also a significant risk for airlines. Holidays are usually one of the first things that should be chopped when consumers feel a pinch.

The European Trailic Commission notes that “The newly announced American trading tariffs have increased the uncertainty of transatlantic travel. “It is not a surprise that traveling in the USA is more exorbitant than traveling on the continent.

I am also worried about the constant controversy related to President Trump, deteriorating declines on IAG transatlantic routes. Recent data show a piercing and extensive decrease in American travels from the beginning of the year.

The TRIVAGO hotel reservation site has reported double -digit reservation drops for states from travelers in Canada, Mexico and Japan. With Trump due to the office by 2029, the conditions can still be bumpy for American travel operators for some time.

Verdict

Having aerial aircraft is risky at the best moment. The margins are lean and the profits may fall due to a sudden boost in costs. The competition is fierce, a strict regulatory landscape, and the threat of strike action (by pilots, on -board staff and airport and air traffic control staff) is never far away.

But the danger of IAG shares is particularly high today, taking into account the significant level of economic uncertainty. To sum up, I am ecstatic to avoid FTSE today despite the low-cost valuation.