The coronavirus pandemic devastated not only International Consolidated Airlines (IAG) (LON:IAG), but the airline sector more generally. Heathrow confirmed a £2bn loss during 2020 as passenger numbers dropped to the airport’s lowest level since the 1970s. However, while the way back for the aviation is not imminent, there is now a roadmap which could tempt investors to look closely at IAG. The Prime Minister has ruled out non-essential travel until May 17, although there will be a review on April 12 on how to safely restart travel ahead of summer.

Good value?

British Airways owner IAG stomached a €7.4bn loss in 2020, a €10bn swing from the year before. “Our results reflect the serious impact that Covid-19 has had on our business,” said Luis Gallego, the chief executive of IAG. As a result, the airline’s share price is down to 191.95p, from 351.31p 12 months ago.

While other industries have experienced rallies as the vaccine roll-out picks up momentum, the aviation sector is being left alone by investors, while question marks remain over the future. On the assumption that travel returns to its normal levels during the summer, IAG shares could represent excellent value. Analysts at UBS Group have issued a 215p price target to its clients on Friday, as well as assigning the stock a “buy” rating. The price target is 12% above the stock’s current price.

Will flying return to pre-pandemic levels?

Airlines reported an influx of holiday bookings following the Prime Minister announcing a roadmap out of lockdown. The demand is there, according to chief executive of easyJet, John Lundgren: “We have consistently seen that there is pent-up demand for travel and this surge in bookings shows the signal from the government that it plans to reopen travel has been what UK consumers have been waiting for.”

However, the sector will need more than demand from consumers to secure its future. A question mark remains over the long-term effects of Covid-19, even once most people have received a vaccine jab. If the disease lingers then international travel could be restricted beyond May 17

“The challenge is to find a way to live with it without keeping huge restrictions in place,” says Azra Ghani, professor of infectious disease epidemiology at Imperial College London.