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.