The accompanying table [click to enlarge] includes statistics for the 58 component companies in the ETF Innovators [ETFI] Global Air Transport Index, which are listed in descending order by market cap. The index is dominated by passenger airlines, but also contains air freight companies such as Atlas Air (AAWW) and helicopter services companies such as Bristow (BRS).
Over the past year, the index declined by 47.6%, compared to a 28% loss for the iShares Dow Transports (IYT), 41% loss for the S&P 500 SPDR (SPY), and 36% loss for the 13-stock AMEX Airline Index. Claymore is set to launch a passenger airline ETF in early 2009 at a time when the industry is benefiting from much lower jet fuel costs, but still facing the prospects of waning demand for air travel among consumers and businesses from the global economic slowdown.
If nothing else, the new airline ETF should be an excellent trading vehicle with high volatility, as a sample of six airline stocks, including Continental (CAL), AMR Corp. (AMR), Delta (DAL), U.S. Airways (LCC), UAL Corp. (UAUA), and AirTran (AAI) have surged off their 52-week lows by 2X-5X with many still trading off their 52-week highs by 50% or more.
A notable laggard is former industry giant, Southwest (LUV), which has lost 37% of its market value in the past year and now ranks number seven in terms of market cap among passenger airlines in the world, with Singapore Airlines (SINGF) taking over the top spot.
Four top performing companies in the index which have either managed to post stock price gains in the past year or currently trade close to their 52-week highs include JetBlue (JBLU), Allegiant Travel (ALGT), Alaska Air (ALK), and Hawaiian Airlines (HA).
$6.34 (12/23/08)
