For one, Americans are apparently traveling more. Southwest (NYSE: LUV) reported a 13% jump in traffic in February, as well as 8.6% growth in average seat miles flown. Southwest’s stock soared nearly 7% in trading. That, in turn lifted FAA, which gives 15.3% of its weight to Southwest.
For another, oil prices have taken a breather today, which no doubt fueled the improved sentiment. Oil prices are still high – above $100 a barrel – but analysts are encouraged that airlines have been raising prices to make up for it, passenger traffic hasn’t fallen accordingly.
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.