Airlines are always a pain to deal with. Yet they remain a staple in our traveling plans. That’s why it’s always interesting to see where the airline industry is headed, especially because it’s a cyclical industry. Has the airline exchange traded fund’s (ETFs) ship come in yet?
According to John Crawley of Reuters, travel on major U.S. airlines fell by 1% in July. Typically, July is one of the busiest months, so this data shows that the industry is still trying to find its bearings in the current economy.
Despite the lower traffic, airlines were able to improve their bottom line with higher fares. The cost to fly one mile rose 17% last month compared to the same period last year. However, it was lower than June’s 22% increase, again, marking some weakness in the sector. [5 ETFs That Could Move on Manufacturing Numbers.]
The Air Transport Association released a report in which it said, “Put simply, the U.S. airline industry continues to be confronted by a systematic inability to cover its cost of investor capital or … to exceed break-even profitability on a sustainable basis.”
Contrarily, Brent Jang of Globe Investor saw a brighter picture in the report issued by the ATA. According to the ATA, premium travel surged almost 12% in the first half of 2010 compared to last year. In addition, economy bookings rose 6.3%. [Airline ETF Cleared For Takeoff.]