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ETF Spotlight on Guggenheim Airline (NYSEArca: FAA), part of a weekly series.

Assets: $51 million

Objective: Tracks the NYSE Arca Global Airline Index, minus fees and expenses.

Holdings: Top holdings include United Airlines (NYSE: UAL, 16.4%), Southwest Airlines (NYSE: LUV, 13.8%) and Delta (NYSE: DAL, 12.8%)

What You Should Know

  • FAA reserves its largest allocation for United States airlines, which get 71.8% of the fund’s weight.
  • Other countries in the fund include Germany (5.3%), Japan (5.2%), Singapore (5.1%) and the United Kingdom (3.6%)
  • Mid-cap companies are the largest weighting, at 54%. Large-caps account for 27.3% and small-caps account for 18.7%.
  • This is the only ETF that gives pure-play exposure to the airline industry

The Latest News

  • The airline industry is coming off its best earnings season since the third quarter of 2007
  • Proof of the global travel industry mending can be found in Delta Air Lines Inc. (NYSE: DAL), which said Wednesday it posted a profit in the third quarter and expects to repeat that in the fourth. The Associated Press reports that most of the recovery owes to international flights and higher baggage fees.
  • U.S. Airways (NYSE: LCC) credited its better than expected earnings with the fact that they’ve cut costs, raised money from assorted fees and got smarter about ticket prices.
  • American Airlines (NYSE: AMR) credited its earnings results with an improvement in the average fare per mile, which rose 11% from last summer.
  • Passenger revenue in the third quarter rose 19% on higher demand and ticket prices, while revenue from cargo shipments surged 28% on higher volume and prices.

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Transportation, Sector ETFs, Airline ETFs

Disclosure: None

Source: Spotlight on Guggenheim Airline ETF: Best Industry Earnings in Three Years