Airline ETF Flying High

ETF Trends

The exchange traded fund that tracks airliner companies has taken off as summer revelers fill seats and lower fuel prices provide relief for the industry.

Guggenheim Airline (FAA) gained 6.7% over the past month and is up 19.8% year-to-date.

According to a press release, U.S. airlines posted a profit of $518 million in the first quarter.

Southwest Airlines (LUV) reported that June 2012 load factor, or the measure of average occupancy on airlines, was 84.4%, compared to 83.9% for the same month year-over-year. Additionally, passenger revenue per ASM is projected to increase 6% in June year-over-year.

The lower oil prices are cutting down airline costs. WTI crude was trading at $89.6 per barrel Wednesday. [ETFs for Lower Oil Prices]

Additionally, airliners are adding new routes to boost air traffic. For instance, Southwest is adding up to four daily nonstop filghts and JetBlue (JBLU) plans on serving Grand Cayman, according to a press release.

Looking ahead, JetBlue will release its earnings on July 25.

Nevertheless, the highly cyclical industry is fighting to maintain its position.

“The airline industry is fragile,” Tony Tyler, International Air Transport Association’s director general and CEO, said in the press release. “Relief in oil prices provides some good news. Unfortunately, the softness in oil markets comes on the back of fears of deterioration in the European economy. Business and consumer confidence are falling. And we are seeing the first signs of that in slowing demand and softer load factors.”

Guggenheim Airline

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FAA_ETF

For more information on a the airliner industry, visit our airlines category.

Max Chen contributed to this article.

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