Airlines Monthly Report | November

21 November 2023

Airlines ETF Key Takeaways | November

SAS Scandinavian Airlines (SK) announced it has selected the consortium that will help the airline emerge from its Chapter 11 bankruptcy process, writes Airways Mag. Airline group Air France-KLM is part of the new investors and will take a non-controlling share in the airline. 

Oil and gas prices rose on October 9 and airline shares fell amid widespread flight cancellations as markets reacted to the surprise attack on Israel by the militant group Hamas, reports The Guardian. Investors appeared to be pricing in the prospect of more instability in the Middle East, given the warning from the Israeli prime minister, Benjamin Netanyahu, that his country was embarking on a “long and difficult war.”

The International Air Transport Association (IATA) announced in October that the strong post-pandemic passenger traffic trend continued in August. Total traffic in August 2023 (measured in revenue passenger kilometres or RPKs) rose 28.4% compared to August 2022. Globally, traffic is now at 95.7% of pre-COVID levels.

 

Macro Outlook

United Airlines is ordering 110 additional Boeing and Airbus jetliners, locking in a supply of new planes into the next decade, reports CNBC, as strong demand and supply chain challenges make new delivery slots scarce. United’s order consists of 50 more Boeing 787 Dreamliners, adding to a firm order of 100 of the twin-aisle planes it announced last December, along with 50 more options.

A strong global labour market is both good and bad for airlines, reports the IATA. In broad terms, the implications are two-fold. These low unemployment rates mean that more people have jobs than ever before, earning steady incomes and supporting air transport demand, IATA explains. On the other hand, staff and skill shortages have become more widespread and apparent in the post-pandemic world. Challenges with recruitment have also been reported. 

U.S. airline stocks posted their longest weekly slide in over two years toward the end of October, as major carriers dial back forecasts in the face of rising oil prices and wages, reports Bloomberg. Delta Air Lines, for example, was the industry’s first to report third-quarter results, and the company reduced its 2023 profit outlook due to escalating costs and fares that are coming down from the post-pandemic spike. 

 

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 31.10.2023

 

1M

3M

6M

YTD

12M

2Y

SI

U.S. Global Jets UCITS ETF

-12.56%

-30.50%

-17.75%

-13.02%

-16.08%

-32.78%

-42.16%

U.S. Global Jets Index

-12.49%

-30.36%

-17.34%

-12.45%

-15.39%

-32.04%

-41.37%

 

Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 31/10/2023. 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.

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