Airlines ETF Key Takeaways | September
TD Asset Management recently highlighted that travel demand has hit pre-pandemic levels and international demand is outpacing domestic travel, as airlines look to capitalize on the growing travel trend. Seeking Alpha, in mid-August, gave an update on the “top performing airline stocks” so far in 2023, and coming in on top as of the date of publication included: 3) Gol Linhas Aereas Inteligentes (+59%), 2) Azul (+99%), and 1) SkyWest Inc. (+155%).
Thanks to the Bipartisan Infrastructure Law, signed in 2021, many U.S. airports are being awarded tens of millions of dollars to upgrade terminal buildings and improve energy efficiency. Among the biggest recipients of federal money is the Dallas-Fort Worth International Airport (DFW), which is getting $25 million to replace an aging HVAC system, install dimmable smart glass in terminal windows and reduce nitrogen oxide (NOx) emissions.
The devastating wildfires on the island of Maui have claimed hundreds of lives this month, and analysts are estimating the damage from the wildfires will be costly – between $8 and $10 billion dollars. As the community works together and officials look into the emergency response, Hawaiian Airlines is doing its part to help those trying to leave the island. The airline is offering $19 flights from Maui to Honolulu for urgent travel out of the island.
Macro Outlook
Overall, earnings season has been upbeat for the airline industry so far this year, with most key U.S. airlines beating on both lines, reports Zacks Research. Although a spike in oil prices may weigh on funds that hold top airline names, as fuel forms a major cost for airlines, Zacks’ analysts believe that investors should not overlook better-than-expected U.S. economic growth and a rebound in international travel. Airlines are also mindful of their cost structure, which accounts for likely higher fuel charges going forward.
Worldwide spending on business travel will top pre-pandemic levels next year and expand to more than $1.78 trillion in 2027, reports Bloomberg and according to the Global Business Travel Association’s annual outlook. Spending has accelerated faster than the group had forecast last year on more stable global economic conditions and as recessions failed to materialize, according to the report released this month.
The U.S. is staring at a daunting projection: a 158% increase in passenger traffic by 2040 compared to 2019 levels, according to Airports Council International (ACI). This massive influx demands advanced infrastructure to accommodate passengers, ensure seamless operations, stimulate competition, and offer world-class customer experiences.
All performance figures are showing net data. Sources available upon request. Past performance is not indicative of future performance and when you invest in ETFs, your capital is at risk.
Airlines ETF Performance
As of 31.08.2023
|
|
1M
|
3M
|
6M
|
YTD
|
12M
|
2Y
|
SI
|
|
U.S. Global Jets UCITS ETF
|
-10.22%
|
5.23%
|
-2.83%
|
12.35%
|
11.57%
|
-16.12%
|
-25.28%
|
|
U.S. Global Jets Index
|
-10.14%
|
5.56%
|
-2.32%
|
12.99%
|
12.00%
|
-15.12%
|
-24.34%
|
Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 31/08/2023. 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. When you invest in ETFs and ETCs, your capital is at risk.