The airline exchange traded fund (
) may be set to soar after combating rising fuel prices, a global
credit crunch, overcapacity and a host of other external factors
that airliners are unable to control.
- The International Air Transport Association (IATA) stated
that passenger demand is recovering as passenger traffic
increased 9.2% in July year-over-year, with the Asia-Pacific
region experiencing a 10.9% gain, and cargo volume surging 22.7%,
reports Palash R. Ghosh for International
. However, the aviation industry in the developed world is still
a little troubled, and companies have had to consolidate and cut
Airline ETF: Takeoff or Landing?
- Randy Tinseth, commercial airplanes vice president for
marketing at Boeing (NYSE:
), remarks that "for passenger traffic in 2010 we're expecting to
see a 5% to 6% improvement over where we were last year; in terms
of cargo, somewhere around 14% or more." [
4 ETFs for the Fall Season.
- Furthermore, Boeing projects a healthy increase in demand for
pilots, engineers and maintenance staff over the next 20 years.
The company also estimates that the whole airline industry will
buy 30,900 new aircrafts valued at $3.6 trillion between 2010 and
Dan Milmo for The Guardian writes
that the global airline business will generate a profit of $8.9
billion this year, up from a previous forecast of $2.5 billion.
The IATA also believes that demand will increase by 5% next year,
but Europe still suffers from overcapacity.
For more information on the airline industry, visit our
Claymore/NYSE Arca Airline
Max Chen contributed to this article.