While airliners have seen an uptick in traffic and average seat miles, shares and related exchange traded funds (ETFs) recently experienced some setbacks as energy prices continue to shoot up and a major player grounds some flights.
Southwest recently grounded 79 planes following an incident that forced an emergency landing. A Southwest flight made an emergency landing last Friday after a riveted lap joint ripped open, which caused a loss of cabin pressure and the deployment of oxygen masks. [Southwest Cancellations Stir Turbulence For Airline ETFs.]
On Wednesday, FAA administrator Randy Babbitt told Congress that there will be a review of an agency program that overseas the aging commercial aircraft fleet to ensure the safety of all flying airplanes, reports Dan Weikel for The Los Angeles Times.
Industry experts say the FAA will increase its due diligence for older commercial aircrafts, and the FAA has already issued a directive that orders airlines to enhance and increase inspections for older and frequently used Boeing 737-300s, 400s and 500s.
In energy costs, jet fuel could face its biggest quarterly rally, reports Yee Kai Pin for Bloomberg. In March, the International Air Transport Association stated that airline profits may drop 50% as a direct result of rising oil costs.
For more information on the airline industry, visit our airline category.
Guggenheim Arca Airline ETF
Max Chen 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.