Airlines are gearing up for an exceptional Thanksgiving travel season as the Transportation Security Administration (TSA) anticipates screening 30 million passengers from November 17 to November 28, a historic high. The Sunday following Thanksgiving is expected to be the peak day, with approximately 2.9 million passengers taking flight, as quoted on CNBC. This puts U.S. Global Jets ETF JETS at a sweet spot.

The year-end holidays represent a crucial period for airlines to bolster their revenues, especially since outside of peak holiday seasons, airlines tend to resort to fare discounts or reduce growth as post-pandemic travel returns to normal. Nonetheless, challenges loom, including higher fuel and labor costs eating into profits, making holiday success crucial.

Thanksgiving: A Test for the Aviation Industry

Thanksgiving will serve as a litmus test for the aviation industry's ability to manage the year-end holidays amidst challenges like a prolonged shortage of air traffic controllers. The Federal Aviation Administration expects Thanksgiving flights to peak at 49,606 on the Wednesday before the holiday, an increase from last year. Delta Air Lines DAL, United UAL, and American Airlines AAL expect significant passenger growth compared to previous years.

Industry-Wide Preparations

Preparation efforts extend across the industry, with United Airlines beginning winter readiness plans in the summer. United has also enhanced its mobile app with self-service tools for rebooking during disruptions and real-time flight information. Additionally, they've introduced a new boarding order in economy class to reduce boarding times.

Airlines' Commitment to Weather Readiness

Weather readiness is paramount, especially for Southwest Airlines, which faced significant disruptions due to winter weather. The airline has invested in de-icing capabilities and technology to improve crew rescheduling during disruptions. Southwest's Chief Operating Officer Andrew Watterson emphasizes the need for airlines to keep moving to prevent issues.

Affordable Thanksgiving Travel

In a pleasant surprise for travelers, many Thanksgiving flight deals are more affordable this year. Airlines have increased their services in recent months, offering relief to consumers dealing with higher interest rates and inflation. The average cost of domestic round-trip Thanksgiving flights is down to $248 from last year's $271 and 2019's $276, according to Hopper, as quoted on CNBC. The Department of Labor's report also shows a more than 13% decrease in airfare.

JETS ETF in Focus

The underlying U.S. Global Jets Index tracks the performance of Airline Companies across the globe with an emphasis on domestic passenger airlines. Delta Airlines (11.40%), Southwest Airlines (10.26%), United Airlines (10.10%) are the top three holdings of the fund. The fund charges 60 bps in fees and has added 7.2% past week (as of Nov 17, 2023).

(Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.)

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