ETF Spotlight: JETS Climbs as Airline Industry Soars

The $1 billion US Global Jets ETF (JETS) has soared more than 30% thanks to the two U.S. airlines making up its largest holdings hitting record highs, as expanding routes and rising demand for premium travel perks boost the entire industry.

JETS has climbed nearly 6% over the past month with the U.S. approaching the long Thanksgiving weekend, traditionally the busiest travel time of the year. Over a six-day period beginning Tuesday, the Transportation Security Administration (TSA), expects to screen approximately 18.3 million people, a 6% increase from 2023. 

"As a pure consumer play, JETS is a way for investors to capitalize on peak holiday travel, which is expected to see records this year," etf.com research lead Kent Thune said, noting also that fuel costs have declined. " I’m not surprised to see that the JETS ETF is up about 6% over the past month, which is double that of S&P 500." 

Carriers' margins have benefitted from travelers' willingness to purchase add-ons, including extra leg room, assigned seating, and early boarding. United Airlines and Delta Airlines, which comprise 15.3% and 11.4% of JETS, are up more than 136% and 57%, respectively in 2024. Those gains have come even as both firms, which are the industry's second and fourth largest by market share, have faced ongoing issues with increasing pilot salaries, maintenance costs and production limits at Boeing.

In a report issued Wednesday, a Senate subcommittee slammed airlines for "junk fees" and will hold a hearing focusing on the issue next month. Still, Delta at its recent investment day said that it planned to increase its offerings for high net-worth customers and that it anticipates revenues from premium tickets surpassing main cabin sales. 

JETS 70% U.S. Airline Allocation

JETS' portfolio, weighted 70% to U.S. carriers, also includes a 10% stake in American Airlines Group, the largest U.S. carrier by market share, and 8.5% holding in budget carrier Southwest Airlines. It has smaller positions in Boeing and travel websites Expedia and TripAdvisor. The fund has a 0.6% expense ratio.

TSA forecast that the Tuesday and Wednesday before Thanksgiving and the Sunday following the holiday will be the busiest travel days ever with roughly three million people journeying on each of those days. 

“This holiday season is expected to be one of the busiest travel periods on record,” Secretary of Homeland Security Alejandro N. Mayorkas said.