Airlines Monthly Report | January

16 January 2024

Airlines ETF Key Takeaways | January

Alaska Airlines announced an agreement to acquire Hawaiian Airlines for $1.9 billion, reports Seeking Alpha, with $235 million in expected synergies. The merger is set to close in 12-18 months pending regulatory approval and shareholder approval from Hawaiian Holdings. 

Airline fares in the U.S. were down -12.1% in November compared to a year ago on an unadjusted basis. According to Seeking Alpha, on a month-to-month comparison, air fares were down -0.4% in November after declining -0.9% in October, according to data compiled by the Bureau of Transportation Statistics. The drop in fares is believed to be tied partially to the lower overall prices for jet fuel and not an indication that demand is wavering. 

Southwest Airlines and its pilots’ union have reached a new preliminary labour agreement, ending months of tense negotiations, reports CNBC. Southwest is the last of the largest U.S. airlines to strike a deal that is set to give pilots big raises. 

Macro Outlook

Airline industry net profits are expected to reach $25.7 billion in 2024, reports the IATA. That will be a slight improvement over 2023 which is expected to show a $23.3 billion net profit. Airline industry operating profits are expected to reach $49.3 billion in 2024 from $40.7 billion in 2023.

The IATA announced estimates for Sustainable Aviation Fuel (SAF) production this month. In 2023, SAF volumes reached over 600 million liters, double the 300 million liters produced in 2022. SAF accounted for 3% of all renewable fuels produced, with 97% of renewable fuel production going to other sectors. In 2024 SAF production is expected to triple to 1.875 billion liters, accounting for 0.53% of aviation’s fuel need, and 6% of renewable fuel capacity. 

Delta Air Lines is adding more flights next year at Austin-Bergstrom International Airport, in a bid to gain market share in one of the country’s fastest-growing airports, writes CNBC. The carrier plans to add 11 nonstop flights from Austin in April, giving it almost 50 peak-day flights, the airline said this month. Austin’s population has grown rapidly in recent years and the city has drawn investment from big companies such as Apple, Tesla and IBM, the story continues.

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 31.12.2023

 

1M

3M

6M

YTD

12M

2Y

SI

U.S. Global Jets UCITS ETF

13.73%

12.29%

-10.88%

11.69%

11.69%

-9.52%

-25.73%

U.S. Global Jets Index

13.79%

12.43%

-10.59%

12.49%

12.49%

-8.54%

-24.67%

 

Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 31/12/2023. 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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