Airline ETF Rallies on a Slew of Positive News

Airline stocks have shown strength this week on positive news. First, the surge in demand for air travel led to a surge and then support from President Trump for the industry's federal aid program. In addition, the analysts' optimistic assessment of some players in the industry is optimistic.

As a result, the US Global Jets ETF JETS, the only ETF dedicated to the aviation industry, gained 4.4% last week (see: ETFs win despite stalled stimulus talks).
JETS in focus
This fund provides exposure to the global aviation industry, including air carriers and manufacturers from around the world, by tracking the US Global Jets Index. In total, the product holds 40 stocks with the highest concentration on the four largest US airlines, which together represent nearly 39.2%. Other firms make up no more than 4.5% of the assets. American firms make up 68.4% of the assets, while Canada, Mexico, China and the UK round out the next few countries.

The fund has an asset base of $ 1.6 billion and a solid trading volume of nearly 5.1 million shares per day. It charges investors an annual fee of 60 basis points and has a Zacks ETF Rank 3 (Hold) with a high risk outlook (see: all industrial ETFs here).
Latest travel request data
According to the latest data from the Transportation Security Administration (TSA), an average of 738,038 people passed through TSA travel security checkpoints every day for the week ending September 13. This is above the previous week's 715,145 daily average, which includes most of the work day vacation weekend.
Trump support
Trump signaled his support for an additional $ 25 billion in federal aid to protect airline jobs and $ 135 billion for the Paycheck Protection Program. Trump tweeted, "The House and Senate should IMMEDIATELY approve $ 25 billion in support of air travel accounting."

The 25 billion federal wage and salary support approved in March kept jobs in the sector until October 1. With the end of the federal aid program, the airlines have now begun to take their employees on leave. Last week, American Airlines AAL, United Airlines UAL, and other U.S. airlines began taking more than 32,000 workers off leave. However, they would reverse course if more help were approved (see: Top ETF Stories of September).
Bullish Views
Most analysts are optimistic about the airlines. JP Morgan predicts airline stocks will rise over the next year as they have enough cash to weather the decline in travel demand triggered by COVID-19. In addition, it is believed that having a vaccine and a rapid COVID-19 test protocol for all passengers prior to departure of all flights could help drive demand for air travel. United Airlines and JetBlue Airways JBLU in particular will increase by almost 50% compared to the closing price on October 6th. JP Morgan has upgraded both airlines to "overweight" with a target price of USD 52 and USD 17 respectively. United Airlines was previously rated neutral with a price target of $ 44, while JetBlue was underweighted by the bank with a price target of $ 12.

BofA Securities raised target price to $ 36 from $ 31 for Delta Airlines DAL, $ 55 from $ 50 for Alaska Air Growup ALK, $ 13 from $ 12 for JetBlue, $ 12 from $ 10 for Spirit Airlines SAVE and $ 147 from $ 130 for Allegiant Travel ALGT.
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JetBlue Airways Corporation (JBLU): Free Stock Analysis Report

Delta Air Lines, Inc. (DAL): Free Stock Analysis Report

United Airlines Holdings Inc (UAL): Free Stock Research Report

American Airlines Group Inc. (AAL): Free Stock Research Report

Allegiant Travel Company (ALGT): Free Stock Research Report

Alaska Air Group, Inc. (ALK): Free Stock Analysis Report

Spirit Airlines, Inc. (SAVE): Free Stock Research Report

US Global Jets ETF (JETS): ETF Research Reports

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