US Global Jets index (JETS)

Key Updates

JETS has surged 3.93% to $33.22 since the June 24 report, breaking above the prior resistance ceiling identified in earlier analysis and briefly touching a record high of $34.66 on June 30. The rally is underpinned by a powerful confluence of structural tailwinds: jet fuel costs have collapsed ~42% from April peaks to ~$2.90/gallon following the U.S.-Iran ceasefire, average ticket prices rose 18% YoY in May, and the ETF has now fully erased pandemic-era losses — a milestone six years in the making. With Delta, American, and United set to report earnings beginning July 10, the investment thesis has materially strengthened, though the fund has since pulled back modestly to $33.22 from its all-time high, warranting attention to near-term consolidation risk.

Current Trend

JETS is in a confirmed uptrend across all measured timeframes, with momentum accelerating sharply in June:

• YTD: +18.35% — the strongest sustained advance since the post-pandemic reopening trade
• 1-month: +13.30% — driven almost entirely by the oil price collapse and geopolitical de-escalation
• 5-day: +6.54% — momentum remains elevated heading into Q2 earnings season
• 1-day: +0.42% — mild consolidation after the June 30 record high of $34.66

The ETF has now cleared the early February pre-conflict resistance level that prior analysis flagged as a key ceiling, confirming a structural breakout. The current price of $33.22 represents a ~4% pullback from the record intraday high, consistent with normal post-breakout consolidation.

Investment Thesis

The core thesis for JETS rests on three reinforcing pillars: (1) a structural collapse in the single largest variable cost for airlines — jet fuel — driven by geopolitical normalization; (2) robust and inelastic demand evidenced by double-digit YoY fare increases; and (3) a supply-constrained capacity environment that preserves pricing power. The pandemic-era loss recovery confirmed by Bloomberg marks a psychological and technical inflection point, potentially attracting a new cohort of long-term institutional investors who had been waiting for this milestone. Near-term, the Q2 earnings cycle beginning July 10 serves as a fundamental catalyst to validate or challenge the current multiple expansion.

Thesis Status

The investment thesis has materially strengthened since the June 24 report. All three pillars are now simultaneously in play: fuel costs are at multi-month lows (~$2.90/gallon vs. ~$5.00 in early April), ticket prices are up 18% YoY with economy fares exceeding 20% growth, and capacity constraints from Spirit Airlines' collapse and Boeing/Airbus delivery backlogs remain structurally intact. The prior key risk — resistance at pre-conflict highs — has been resolved to the upside with the ETF printing a record $34.66. The remaining thesis risks are the pace of oil market normalization (physical supply adjustment lagging the futures move) and the IATA's projection of a $98 billion sectoral fuel bill increase for the full year, which tempers the margin expansion narrative for H1 2026 results.

Key Drivers

The following developments have driven the 3.93% advance since the last report and represent the primary factors shaping the near-term outlook:

• Jet fuel cost collapse: Fuel prices fell from ~$5.00/gallon in early April to ~$2.90/gallon by end of June — a ~42% reduction — following the U.S.-Iran ceasefire and crude oil futures declining ~20% in June alone. At 25–30% of operating costs, this is the most powerful margin lever in the industry. (Morningstar)
• Pandemic-era loss recovery milestone: JETS has fully recovered six years of pandemic-era losses, a landmark that signals a new phase of investor confidence and broadens the potential buyer base. (Bloomberg)
• Record fare environment: Average ticket prices rose 18% YoY in May (economy fares +20%+), supported by capacity discipline from Spirit's collapse and ongoing OEM delivery backlogs, providing durable revenue tailwinds into the peak summer season. (Morningstar)
• Riyadh Air U.S. route approval: The Saudi PIF-backed carrier received U.S. Transportation Department approval to operate U.S.-Saudi routes, with Delta as a codeshare partner launching Atlanta-Riyadh nonstop service in October. This expands international connectivity and supports premium long-haul demand for U.S. carriers. (Reuters)
• Q2 earnings catalyst: Delta, American, and United are set to report earnings beginning July 10, providing the first hard data on the margin impact of lower fuel costs and elevated fares — a potential re-rating event for the sector. (Morningstar)

Technical Analysis

JETS has executed a clean breakout above the early February pre-conflict resistance level — the ceiling flagged in the June 15 and June 18 reports — and printed an all-time high of $34.66 on June 30. The current price of $33.22 represents a ~4.2% retracement from that peak, which is technically constructive as it suggests profit-taking rather than trend reversal. Key levels to monitor:

• Support: $31.96 (prior report high / breakout confirmation level); $31.07 (June 18 pivot); $30.36 (June 17 consolidation low)
• Resistance: $34.66 (June 30 all-time high); no historical overhead supply exists above this level given the pandemic-era losses have been fully recovered
• Momentum: The 5-day return of +6.54% and 1-month return of +13.30% indicate an extended but still trend-consistent move; the modest 1-day gain of +0.42% suggests the ETF is digesting gains ahead of the July 10 earnings catalyst

The absence of overhead resistance above $34.66 is technically significant — price discovery above the all-time high is unconstrained by prior supply. However, the CNBC-cited caution regarding chart resistance at pre-conflict highs has been resolved, and the next directional move is likely to be driven by Q2 earnings outcomes rather than technical factors.

Bull Case

• 1. Structural fuel cost tailwind at 42% reduction: Jet fuel has declined from ~$5.00 to ~$2.90/gallon — a ~42% drop — representing a transformational margin improvement for carriers heading into peak summer travel. At 25–30% of operating costs, every $0.10/gallon reduction materially expands EBIT margins across the sector. (Morningstar)
• 2. Record fare pricing with structural capacity constraints: Average ticket prices up 18% YoY in May (economy +20%+), supported by the permanent exit of Spirit Airlines and persistent Boeing/Airbus delivery backlogs. This supply-demand imbalance is not a cyclical phenomenon — it is structural and likely to persist through at least 2026. (Morningstar)
• 3. Pandemic-era loss recovery signals new institutional demand phase: The full recovery of pandemic-era losses removes a major psychological overhang and may trigger re-allocation by long-only institutional mandates that had been underweight airlines pending this milestone. (Bloomberg)
• 4. Q2 earnings as a fundamental re-rating catalyst: Delta, American, and United report beginning July 10. With fuel costs collapsing mid-quarter and fares at record levels, Q2 results are likely to materially beat consensus estimates, potentially driving a fresh leg higher for the ETF. (Morningstar)
• 5. International route expansion via Riyadh Air partnership: Delta's planned Atlanta-Riyadh nonstop service in October, enabled by Riyadh Air's U.S. approval, opens a high-yield premium long-haul market. Riyadh Air's 182+ aircraft order backlog (Boeing 787s, A321neos, A350s) signals durable long-term demand for U.S. carrier partnerships. (Reuters)

Bear Case

• 1. IATA projects $98 billion sectoral fuel cost increase for full-year 2026: Despite the recent fuel price collapse, the IATA estimates a $98 billion increase in the sector's aggregate fuel bill for 2026 — a figure that would roughly halve global airline profits. H1 2026 fuel costs were elevated, and the full-year average may still significantly exceed 2025 levels. (CNBC)
• 2. Physical oil market normalization lag: Industry analysts note that the physical oil market will require time to normalize after 3.5 months of Strait of Hormuz disruption. The gap between futures pricing and actual jet fuel procurement costs means near-term margin improvement may be less immediate than equity markets are pricing in. (CNBC)
• 3. Geopolitical re-escalation risk to oil prices: The entire fuel cost tailwind is predicated on the durability of the U.S.-Iran ceasefire framework. Any breakdown in negotiations or renewed Strait of Hormuz disruption could rapidly reverse oil prices, eliminating the primary driver of the June rally. (Bloomberg)
• 4. Competitive pressure from new international entrants: Riyadh Air's approval to operate U.S. routes, combined with its ambition to serve 100+ international destinations by 2030, introduces a well-capitalized new competitor on transatlantic and Gulf routes. While currently a Delta partner, its long-term competitive posture could pressure yields on key international corridors. (Reuters)
• 5. ETF pullback from all-time high signals near-term consolidation risk: JETS has retraced ~4.2% from its June 30 record of $34.66 to the current $33.22. With the ETF extended on a 1-month (+13.30%) and YTD (+18.35%) basis, profit-taking ahead of the July 10 earnings reports could extend the consolidation, particularly if Q2 results reflect the elevated H1 fuel cost environment rather than the recent collapse. (CNBC)