CashNews.co
Airline stocks are rallying, with the U.S. Global Jets ETF surging 2.4% in recent trading toward the highest close since February 2022. With the ETF having its best month year, up 11.4%, it needs just a 1.5% further gain to reach a three-year high.
What may be helping fuel Monday’s rally, Melius Research analyst Conor Cunningham said even with the gains already seen, the airline sector may be just starting a new bull cycle,. boosted by capacity (seat-supply) discipline that puts it a path to double in the next year or two.
He believes the current set up is similar to that of late 2012, when the airlines started looking to limit capacity growth to boost margins.
From the end of October 2012 through the end of 2014, the NYSE Arca Airline Index (the Jets ETF wasn’t around back then) rocketed 166.4%.
Among the legacy carriers, United Airlines’ stock was climbing 3.4% on Monday toward the highest close since Feb. 21, 2020, which was just before the COVID-pandemic induced selloff. The stock has run up 35.2% this month to make it the Jets ETF’s and the S&P 500’s best October performer.