Airline Stocks, ETF Could Fly Into the New Year

“The current setup looks highly compelling to us. 2019 capacity is anticipated to be tighter than 2018 (~3.5% versus ~4.5%), and we remain of the view that further cuts are likely in the event fuel rises from here,” Baker said in a note.

U.S. Sector Strength

Citi sees sector strength in the U.S., which could help offset unit revenue pressure in international markets.

Macquarie also added on to the positive outlook in response to the third quarter earnings for the sector, according to Investopedia.

“Generally speaking, we believe we are seeing the continuation of a strong demand and revenue environment into the end of the year, lending itself to fare increases and ancillary opportunities,” Macquarie analysts said.

Overall, analysts project clear skies for the airline industry in the year ahead, bolstered by better outlooks for margins, capacity and fuel prices, according to Barron’s.

For more information on the airline ETF, visit our Airline category.