Airline stocks and sector-related exchange traded funds caught a tailwind Wednesday after United Airlines (NYSE: UAL) and American Airlines (NasdaqGS: AAL) anticipate stronger pricing power and improved revenue trends.
On Wednesday, the U.S. Global Jets ETF (NYSEArca: JETS), the only dedicated airline industry ETF, gained 2.1% while UAL jumped 6.7% and AAL increased 3.0%. JETS includes a 12.4% tilt toward UAL and 12.0% AAL.
Airline stocks strengthened after American said revenue for every seat flown per mile in the fourth quarter will be up 5% to 6% year-over-year, or two points better than previously expected, due to higher average prices and more last-minute bookings, the Associated Press reports.
The carrier also projected Q4 adjusted pretax margin to come in at about 6.5% to 7.0%, compared to earlier projections of 4.5% to 6.5%, Investor’s Business Daily reports.
This follows United’s late-Tuesday statement that revenue per mile figure would match last year’s fourth quarter, an improvement over its previous forecasts for a decline of up to 2%.