The Jetsetters: U.S. Global Jets ETF Takes Off Amid Airline Gains

The U.S. Global Jets ETF JETS is experiencing impressive growth, climbing 51.65% over the last year due to strong performances from key players like Delta Air Lines Inc DAL and Southwest Airlines Co LUV.

Recently, the ETF signaled a bullish trend with a Golden Cross, as its 50-day moving average surpassed the 200-day moving average.

Chart created using Benzinga Pro

The 50-day simple moving average stands at $19.95, surpassing the 200-day average of $19.71, indicating a positive trend ahead.

As travel demand increases, the airline industry enjoys a notable upswing. Yet, the final quarter of 2024 poses potential challenges. Will the sector sustain its momentum?

Read Also: Delta Air Lines Soars With A Golden Cross: New Cabins, New Heights

Profits Fly High for JETS ETF

The JETS ETF has performed strongly in 2023, gaining 20.33% year-to-date. Delta and Southwest help drive this growth, alongside a stellar performance by United Airlines Holdings Inc UAL.

United recently reached a 52-week high following impressive third-quarter earnings that surpassed expectations, reporting $3.33 per share and a total revenue of $14.84 billion.

Even though some pressures exist, including a slight drop in revenue per available seat mile (RASM), United’s outlook remains bright supported by strong free cash flow of $3.4 billion year-to-date.

United’s stock has also surged by 83.64% this year, offering optimism for JETS ETF investors, although Delta and Southwest might face more challenges moving forward.

Delta Faces Challenges Following Outage

Delta Air Lines has encountered some obstacles recently, struggling from a costly technology outage this summer. The incident, involving cyber firms CrowdStrike Holdings Inc CRWD and Microsoft Corp MSFT, resulted in a loss of $380 million in revenue.

Despite this setback, Delta reported $15.68 billion in third-quarter revenue, though it did miss analysts’ expectations.

Looking ahead, Delta is optimistic about holiday travel potentially boosting its fourth-quarter earnings, predicting a revenue increase between 2% and 4%. However, uncertainty surrounding upcoming elections and concerns over future technology failures raises questions about Delta’s ability to recover.

Southwest Surpasses Estimates, Yet Faces Boeing Worries

On a brighter note, Southwest Airlines exceeded expectations in its third-quarter results with earnings of 15 cents per share against forecasts of breakeven. Revenue reached $6.87 billion due to greater travel demand than anticipated.

However, the airline’s stock dipped as investors expressed concerns regarding potential Boeing Co BA delivery delays that could hinder its prospects.

Furthermore, Southwest has formed an alliance with activist investor Elliott Investment Management, suggesting possible strategic changes ahead. While the company maintains a cautious outlook about Boeing, long-term investors may find potential for growth worth the risk.

The Future for Airline Investors

As 2024’s fourth quarter progresses, both JETS ETF investors and airline stockholders will be closely observing market trends. Will robust travel demand be sufficient to counterbalance the challenges facing Delta and Southwest?

Additionally, can investments in infrastructure, technology advancements, and collaborations with firms like Microsoft lead to a more stable industry in 2025?

With Delta managing outage repercussions, Southwest handling Boeing uncertainties, and United flying high, the airline sector continues to face its share of intrigue. Investors should prepare for what looks to be a potentially turbulent journey ahead.

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