Airlines ETF Monthly Report: Key Takeaways
Delta Air Lines announced on July 18 an order for 100 Boeing airplanes worth upward of $13 billion, which indicates the company is bullish on the future of flight demand. The deliveries are slated to begin in 2025 and this is Delta’s first fresh order for new Boeing planes in more than a decade. [1]
American and Delta Air Lines both reported their first operating profit since the start of the pandemic, reports CNN Business, as strong demand for air travel and high fares allowed the carriers to overcome rising fuel prices. American posted record second quarter revenue of $13.4 billion, up 12% from 2019 levels, even though capacity was down nearly 9%. Revenue at United was up 6% compared to the same period of 2019, with capacity down 15%. [2]
The three big U.S. airlines shared their Autumn capacity trimming plans, reports Forbes. American Airlines CEO Robert Isom noted that capacity for the fall was trimmed, and also that it may take years for their capacity to be back to normal again. United’s CEO, Scott Kirby, was more optimistic but still suggested that the industry won’t be back to normal until 2023, the article continues. [3]
Macro Outlook
For many airlines, premium cabin classes contribute to a large part of the air passenger revenue, reports the International Air Transport Association (IATA) on July 16. The latest data from the IATA suggests a shifting, upward trend as well as an overall increase in premium RPK (revenue passenger kilometres) shares at the industry level. [4]
According to a speech from U.S. Treasury Secretary Janet Yellen on July 19, the U.S. economy is on solid footing and in a good position to avoid a downturn, reports Barron’s – even amid rising interest rates. Airline stocks reacted on these comments, with the broader market, thanks to the optimism that the Fed can tame interest rates without forcing a recession. [5]
The global aviation industry has been plagued by staffing issues, long passenger queues, mass flight cancellations and delays for nearly half of 2022, reports Simple Flying. According to United Airlines CEO Scott Kirby, however, the headaches of flying might continue until next summer. “The biggest challenge that faces us probably for the next 12 months is all the infrastructure challenges around aviation,” Kirby explained. [6]
Please remember that past performance is not indicative of future performance, and when you invest in ETFs, your capital is at risk.
Airlines ETF Performance Table (As of 31.07.2022)
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1M
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3M
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6M
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YTD
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12M
|
SI
|
|
U.S. Global Jets UCITS ETF (Acc)
|
7.47%
|
-17.73%
|
-16.59%
|
-16.18%
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-22.44%
|
-31.19%
|
|
U.S. Global Jets Index
|
7.53%
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-17.54%
|
-16.31%
|
-15.72%
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-21.76%
|
-30.59%
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Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 31/07/2022. Performance before inception is based on back tested data. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product.
Learn more about the U.S. Global Jets UCITS ETF