The U.S. Global Jets ETF (NYSE: JETS) debuted at the end of April and for a while, the lone dedicated airline exchange traded fund flummoxed investors by trading lower in unison with oil.
Fortunately for airline bulls, JETS and oil are diverging in favor of the airline fund. That stands to reason because jet fuel, a petroleum byproduct, is the largest input cost for airlines. Over the past month, JETS is up 5.5 percent while the United States Oil Fund (NYSE: USO) has plunged 17.3 percent. Tuesday was a microcosm of that trade when JETS jumped 1.1 percent in a lousy tape for U.S. stocks while USO sank 2.7 percent.
“According to Jim Corridore, an S&P Capital IQ equity analyst, years of consolidation, bankruptcies, and capacity adjustments have given the airlines increased pricing power, which has led to rising industry revenues and passenger yields over the past five years. Fare increases, fewer fare sales and ...
/www.benzinga.com/trading-ideas/long-ideas/15/08/5758057/long-airlines-short-oil-is-working-again alt=Long Airlines, Short Oil Is Working Again>Full story available on Benzinga.com
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