Delta Air Lines' DAL strong earnings have sparked a solid rally in the broader U.S. airline sector, which has recently struggled due to dampened consumer sentiment and trade policy uncertainty. U.S. Global Jets ETF JETS spiked 7.3% to the highest level since February, while Themes Airlines ETF AIRL jumped 7.9% on Thursday.
Why Delta Earnings Infused Optimism?
Delta Air Lines reported earnings per share of $2.10, beating the Zacks Consensus Estimate of $2.04. However, it declined 11% from the year-ago quarter. Revenues moved down marginally year over year to $16.65 billion, beating the Zacks Consensus Estimate of $16.2 billion.
The air carrier restored its 2025 guidance, which it had suspended after the first-quarter 2025 earnings report. DAL expects earnings of $5.25-$6.25 per share. The Zacks Consensus Estimate is pegged at earnings of $5.11.
Further, Delta signaled strong momentum in the airline industry. It reported that bookings had stabilized, premium ticket revenues were up 5% year over year, and loyalty program revenues rose 8%, even as revenues from standard main cabin fares declined (read: Aviation Market to Soar Above Turbulence? ETFs to Consider).
CEO Ed Bastian highlighted that “consumer and corporate confidence” are improving, a key for sustained travel demand.
This has reignited optimism across the aviation sector, with other airlines also soaring. United Airlines UAL rallied 14.3%, American Airlines AAL moved up 12.7%, Alaska Air ALK rose 9% and Southwest Airlines (LUV) gained 8%. Delta climbed 12% on the day.
Falling Oil Prices
Falling oil prices are adding strength to the airline stocks and ETFs. Delta’s fuel expenses dropped 11% year over year, with per-gallon costs down 14%, easing pressure on margins.
JETS in Focus
U.S. Global Jets ETF provides exposure to the global airline industry, including airline operators and manufacturers from all over the world, by tracking the U.S. Global Jets Index. The product holds 49 securities with the highest concentration on the top four largest U.S. carriers, which account for nearly an 11% share each. American firms account for 75.5% of the assets, followed by Canada, France and Spain.
U.S. Global Jets ETF has gathered $885.5 million in its asset base, while seeing a heavy trading volume of nearly 4 million shares a day. It charges investors 60 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy), with a High risk outlook.
AIRL in Focus
Themes Airlines ETF offers exposure to the largest 29 airline companies by market capitalization by tracking the Solactive Airlines Index. American firms make up the largest share in the basket at 42%, followed by the U.K. firms with a 12.8% share. Themes Airlines ETF has managed assets worth $1 million and charges 35 bps in annual fees. It trades in an average daily volume of under 500 shares.
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Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Airlines Holdings Inc (UAL): Free Stock Analysis Report American Airlines Group Inc. (AAL): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report U.S. Global Jets ETF (JETS): ETF Research Reports Themes Airlines ETF (AIRL): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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