If the airline exchange traded fund (ETF) plays its cards right, it could soar straight into next year.

The early numbers show that airlines are on track for an “outstanding” year. That’s because airlines are leaner and meaner than they were before the recession. Let’s face it – the various and sundry fees haven’t exactly hurt their  bottom lines, either. Year-to-date, Guggenheim Airline (NYSEArca: FAA) is up 36.8%.

The good times for airlines may not end with 2010, either.

  • Top corporate travel agencies and travel consultants say they now expect negotiated airfares and hotel rates in the United States to climb next year, into the double digits. Business travel is on the mend, and any economic improvements would be icing on the cake. [Airline ETF Flying on Merger News.]
  • Jane L. Levere for The New York Times reports that hotels and airlines should start to wield more power as the economy gains momentum and the international travel picks up.

Those pat-downs many seemed to think would be a death knell for the airlines amounted to a lot of hoo-ha over nothing. Susan Carey for The Wall Street Journal reports that planned boycotts of new airport-screening procedures fizzled out. There were no reports of security delays due to passengers balking at stepping through the refrigerator-size body scanners.[Airline ETF Grows on the Fly.]

This is one sector you might want to have on your radar in the coming months as the economic recovery continues. As a play on the global airline sector, FAA should benefit from both improving corporate balance sheets and consumer discretionary spending. Just watch those gas prices; when they spike, it tends to put a hurting on the airlines.

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.