US Global Jets index (JETS)

Key Updates

JETS has declined 2.51% since the September 22 report, closing at $28.73 and giving back the gains that had pushed it to $29.47. The pullback coincides with a renewed jet-fuel price surge tied to the Strait of Hormuz supply shock, with Gulf Coast jet fuel reaching $4.44 per gallon, off the 2026 peak of $4.78. Airlines are trimming schedules through year-end, which could raise holiday airfares, while carriers with stronger balance sheets (Delta, United, Southwest) are viewed as better positioned than budget airlines (Allegiant, Frontier, JetBlue).

Current Trend

YTD performance stands at +2.35%, with the 6-month return at +15.24%. The 1-day decline of -1.34% follows a 5-day gain of +3.35%, indicating a short-term reversal after a strong weekly push. The 1-month return of -3.17% suggests the ETF remains below its early-September levels. The current price of $28.73 sits just above the prior local peak of $28.72 set on September 4, which now acts as a support level. The September 22 close of $29.47 represented a breakout above that level; the current pullback is testing whether that breakout holds.

Investment Thesis

The core thesis centers on a potential demand recovery in air travel, supported by solid booking trends, offset by fuel-cost inflation driven by geopolitical supply shocks. The Jet2 report shows summer 2026 bookings up 8.8% year-on-year, above the 7.1% reported in July, and the company has increased fuel hedging to 93% of annual requirements at $753 per metric ton, up from 90% at $743. This demonstrates that airlines with hedging programs can mitigate fuel volatility. However, the jet-fuel price surge following the Hormuz stalemate introduces a second fuel shock in less than a year, with refiners prioritizing diesel production and squeezing jet-fuel supply. The investment thesis remains intact but is increasingly dependent on airlines' capacity discipline and hedging strategies to offset input cost pressure.

Thesis Status

The thesis is under moderate pressure. The 2.51% decline since the last report reflects market concern over fuel costs, but the magnitude is contained relative to the 15.24% six-month gain. Jet2's ability to raise hedging coverage and report strong bookings supports the demand-recovery side of the thesis. However, the fuel shock introduces near-term margin risk, particularly for budget carriers with less hedging flexibility. The thesis status remains "constructive but cautious," with the balance shifting toward fuel-cost risk as the primary headwind.

Key Drivers

• Jet-fuel price surge: Gulf Coast jet fuel at $4.44 per gallon, near 2026 peak of $4.78, driven by Hormuz supply shock and refiners prioritizing diesel production (Morningstar, 2026-09-22).
• Airline capacity cuts through year-end, potentially raising airfares for Thanksgiving and Christmas holidays (Morningstar, 2026-09-22).
• Jet2's strong summer bookings (+8.8% year-on-year) and increased fuel hedging to 93% at $753/tonne (Reuters, 2026-09-03).
• Differential positioning: Delta, United, and Southwest viewed as better positioned; Allegiant, Frontier, and JetBlue face greater pressure (Morningstar, 2026-09-22).

Technical Analysis

At $28.73, JETS is testing the $28.72 prior local peak from September 4, which now serves as support. The September 22 breakout to $29.47 has been partially retraced, with the price now 2.51% below that level. The 5-day gain of +3.35% versus the 1-day loss of -1.34% suggests a short-term consolidation after a sharp move. The 6-month uptrend remains intact at +15.24%, while the 1-month decline of -3.17% indicates the ETF is still below its early-September high. Key resistance is the September 22 high of $29.47; key support is the $28.72 level, followed by the September 9 close of $27.99.

Bull Case

• Jet2 reported summer bookings up 8.8% year-on-year, above the 7.1% reported in July, indicating sustained demand recovery (Reuters, 2026-09-03).
• Jet2 increased fuel hedging to 93% of annual requirements at $753/tonne, demonstrating that airlines can mitigate fuel-cost volatility through proactive hedging (Reuters, 2026-09-03).
• JETS is up about 1.5% this month versus 1% for the S&P 500, showing relative outperformance despite fuel headwinds (Morningstar, 2026-09-22).
• Carriers with stronger balance sheets (Delta, United, Southwest) are better positioned to withstand the fuel shock, supporting the broader index (Morningstar, 2026-09-22).
• Jet2 plans to move its listing to the main market of the London Stock Exchange, indicating financial stability and growth confidence (Reuters, 2026-09-03).

Bear Case

• Jet-fuel prices have surged to near their highest levels since the U.S.-Iran war began, driven by the Hormuz supply shock and broader fuel crisis (Morningstar, 2026-09-22).
• Airlines are trimming schedules through year-end, potentially raising airfares for Thanksgiving and Christmas, which could dampen holiday demand (Morningstar, 2026-09-22).
• Airlines face a second fuel shock in less than a year, with Citi noting capacity cuts may be slower than in spring (Morningstar, 2026-09-22).
• Budget airlines such as Allegiant, Frontier, and JetBlue face greater pressure, potentially dragging on the index's performance (Morningstar, 2026-09-22).
• Refiners are prioritizing diesel production, squeezing jet-fuel supply and keeping prices elevated (Morningstar, 2026-09-22).