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· Airline industry has been underperforming since the pandemic hit, but that trend might be about to change.
· US global jet industry is off to a flying start this summer.
· The outlook might be brightening, but there are some headwinds blowing.
The US global jet industry had not that of a different return compared to the S&P 500 index from late 2015 until 2019. However, total performance was down by 16.57%, while the US blue chip stock index was up 106.97% over the last seven years.
Nevertheless, that underperformance might be about to change as, more recently, consumer demand has been picking up. The pandemic is behind us, and borders are opened as usual. Despite recession fears and inflation scares, people are flying to explore, re-connect and do business face to face. Airline spending is picking up, as Bank of America noted, “Year-over-year airline spending growth for the week has turned positive again. We see signs of a solid start to summer travel.”
Big ticker airline spending is about to cross the positive territory, which likely responds to future travel booking, have accelerated recently, implying a positive momentum for the industry.
The trade association Airlines for America forecasted that an all-time high of 257 million passengers would board US airlines from June 1 to Aug. 31. Demand is picking up again, as of late major US-based airlines flights are showing overbooking or negative seats.
Despite cost-of-living pressures, consumer spending has remained solid, and the demand for air travel remains robust. On top of that, air passenger demand has already exceeded its pre-COVID (2019) level this year. Air travel volumes have surged to the highest level in four years and past their Pre-Pandemic Levels, as the purple dotted line indicates 2023 data.
Global Airlines’ financial performance in 2023 beats expectations as several key developments contribute to more robust profitability.
China lifted COVID-19 restrictions earlier in the year than anticipated. The second-largest economy in the world finally relaxing its zero covid policy after three long years should substantially boost air travel and be interpreted as bullish for the US global jets ETF (JETS).
Secondly, cargo revenues remain above pre-pandemic levels even though volumes have not.
Thirdly, on the cost side, there is some relief. Jet fuel prices, although still high, have moderated over the first half of the year.
On the flip side, there is always the risk that, despite central banks’ efforts to calibrate the best levels for interest rates to cool off inflation while avoiding tipping the economy into recession. However, the industry outlook might shift negatively if they fail and tip their economies into a recession leading to job losses.
Additionally, it’s worth pointing out that the short interest, which measures the percentage of outstanding shares of a given company or industry held by short sellers, has picked up from 1.3% in February 2021 to 10.7% as of June 2023.
JETS is a pure-play ETF that focuses on the global commercial aviation industry. Among its top holdings are Delta Air Lines Inc., Southwest Airlines Co., American Airlines Group Inc., and United Airlines Holdings Inc.
Traders can long JETS using our 3x Airlines
Alternative traders can short JETS using our -3x Airlines
Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.
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Notice
If you are not classified as an institutional investor, you will be categorised as a private/retail investor. At this time, we cannot send communications directly to private/retail investors. You are welcome to view the contents of this website.
If you are an ‘Institutional investor’, you affirm either that you are a Per Se Professional Client, or that you wish to be treated as an Eligible Counterparty Client, both as defined under the Markets in Financial Instruments Directive, or an equivalent in a jurisdiction outside the European Economic Area.
Risk Warnings
The value of an investment in ETPs may go down as well as up and past performance is not a reliable indicator of future performance. Trading in ETPs may not be suitable for all types of investor as they carry a high degree of risk. You may lose all of your initial investment. Only speculate with money you can afford to lose. Changes in exchange rates may also cause your investment to go up or down in value. Tax laws may be subject to change. Please ensure that you fully understand the risks involved. If in any doubt, please seek independent financial advice. Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuer.
This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.
Nothing on this website is advice on the merits of any product or investment, nothing constitutes investment, legal, tax or any other advice nor is it to be relied on in making an investment decision. Prospective investors should obtain independent investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in their jurisdiction.
This website complies with the regulatory requirements of the United Kingdom. There may be laws in your country of nationality or residence or in the country from which you access this website which restrict the extent to which the website may be made available to you.
United States Visitors
The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions.
Persons accessing this website in the European Economic Area
Access to this site is restricted to Non-U.S. Persons outside the United States within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”). Each person accessing this site, by so doing, acknowledges that: (1) it is not a U.S. person (within the meaning of Regulation S under the Securities Act) and is located outside the U.S. (within the meaning of Regulation S under the Securities Act); and (2) any securities described herein (A) have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction and (B) may not be offered, sold, pledged or otherwise transferred except to persons outside the U.S. in accordance with Regulation S under the Securities Act pursuant to the terms of such securities. None of the funds on this website are registered under the United States Investment Advisers Act of 1940, as amended (the “Advisers Act”).
Exclusion of Liability
Certain documents made available on the website have been prepared and issued by persons other than Leverage Shares Management Company. This includes any Prospectus document. Leverage Shares Management Company is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, Leverage Shares Management Company shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes no guarantee as to the accuracy of any information or content on the website. The description of any ETP Security referred to in this website is a general one. The terms and conditions applicable to investors will be set out in the Prospectus, available on the website and should be read prior to making any investment.
Leverage Investment
Leverage Shares exchange-traded products (ETPs) provide leveraged exposure and are only suitable for experienced investors with knowledge of the risks and potential benefits of leveraged investment strategies.
Cookies
Leverage Shares Management Company may collect data about your computer, including, where available, your IP address, operating system and browser type, for system administration and other similar purposes (click here for more information). These are statistical data about users’ browsing actions and patterns, and they do not identify any individual user of the website. This is achieved by the use of cookies. A cookie is a small file of letters and numbers that is put on your computer if you agree to accept it. By clicking ‘I agree’ below, you are consenting to the use of cookies as described here. These cookies allow you to be distinguished from other users of the website, which helps Leverage Shares Company provide you with a better experience when you browse the website and also allows the website to be improved from time to time. Please note that you can adjust your browser settings to delete or block cookies, but you may not be able to access parts of our website without them.
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