2021 Airline Recap: Improving Passenger Traffic Was a Key Positive Trend In 2021

January 19, 2022


  • Airline traffic, as measured by the Transportation Security Administration (TSA) checkpoint data, continued to improve during 2021, and continued to improve during the holiday season. The Thanksgiving holiday air travel doubled when compared to last year and came in slightly below 2019 levels overall. For seven consecutive days, daily airport passenger volumes exceeded 2 million people, according to the TSA.
  • Chase credit card spending on air travel continued to improve in 2021, according to company reports, and is approaching levels not witnessed since 2019. Similar positive momentum was seen with combined Bank of America debit and credit card data, with daily airline spending above 2019 levels.
  • According to Seaport Research, Southwest Airlines was the industry’s pricing leader at the end of 2021, and its cost challenges in 2022 could lead to a better pricing environment, particularly for Spirit Airlines and other such carriers.


  • According to Goldman Sachs, labor inflation has been called out across the airline industry as the main driver of higher-than-expected costs exiting the year 2021. For example, many carriers have had to raise the minimum wage for relevant employees to attract and keep talent and have had wage inflation through third-party suppliers passed on, too.
  • Airline shares underperformed the market in 2021, according to Bloomberg data, primarily due to fears that a surge in oil prices could inflate the price of jet fuel, undermining a recovery in air travel. Crude had topped $80 a barrel in December. With shortages of natural gas and coal raising the possibility of a full-blown energy crisis, some industry analysts say it has the potential to go higher still. Historically, fuel accounts for 25% of airlines’ overall expenses.
  • European airlines are more exposed to the higher fuel prices than pre-pandemic times, as they have reduced hedging during the crisis, according to company reporting. Prior to the pandemic, European airlines hedged 50% to 90% of their 12-month jet-fuel consumption. However, the grounding of fleets during the pandemic has resulted in large hedging cash losses and most companies have reduced hedging levels as a result.


  • According to the Bank of America, bookings across the U.S. and Europe improved following the COVID-19 Delta variant outbreak over the summer of 2021. In fact, 27% of global business travelers already started to travel again, and 46% now expect to be on the road in 2022.
  • The recently passed bipartisan Infrastructure Bill could help improve the U.S. airports. As part of this new infrastructure deal, $25 billion USD will be invested in airports to address repair and maintenance backlogs, reduce congestion and emissions near ports and airports, and drive electrification and other low-carbon and carbon-free technologies.
  • The TSA extended its travel mask mandate through January 18 to minimize the spread of COVID-19 on public transportation. Dr. Anthony Fauci, the U.S.’s top infectious disease doctor, supports a vaccine mandate for air travel, but not all airlines are on board with this. Dr. Fauci told the Washington Post that he is supportive of a vaccine mandate for air travel but is not actively endorsing it.


  • UBS, a Swiss multinational investment bank, analyzed 247 countries and regions (covering roughly 60,000 travel routes), and continued to show elevated levels of travel restrictions. Global travel restrictions remained high at 84% of global routes at the end of 2021. Intra-EU travel restrictions remain close to 100% of routes.
  • Travel budgets could have a hard time fully recovering to 2019 levels. The expectation is for an average of 29% of 2022 travel budgets to be allocated instead to virtual meetings, according to industry analysts. ‘Virus concerns’ were the primary reason cited for using virtual meetings. Chairman and CEO of American Airlines, Doug Parker, stated that he remains bullish on business travel and believes video communication platforms such as Zoom can and will co-exist with corporate travel, rather than compete.
  • COVID-related negative headlines could continue to pressure airlines’ shares in the near-term, until more is understood about the Omicron variant or until U.S. and European COVID cases start to decline again. This includes new travel restrictions that, except for those placed on travel to-and-from certain African countries, have been restrained in most cases in North America and Europe.

Looking to gain exposure to a far-reaching portfolio of companies within the global airline industry, including airline operators and manufacturers? Look no further!

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Please carefully consider a fund’s investment objectives, risks, charges, and expenses. For this and other important information, obtain a statutory and summary prospectus for JETS here. Read it carefully before investing.

Disclosures: Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the funds. Brokerage commissions will reduce returns. Because the funds concentrate their investments in specific industries, the funds may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries. The funds are non-diversified, meaning they may concentrate more of their assets in a smaller number of issuers than diversified funds. The funds invest in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks are greater for investments in emerging markets. The funds may invest in the securities of smaller-capitalization companies, which may be more volatile than funds that invest in larger, more established companies. The performance of the funds may diverge from that of the index. Because the funds may employ a representative sampling strategy and may also invest in securities that are not included in the index, the funds may experience tracking error to a greater extent than funds that seek to replicate an index. The funds are not actively managed and may be affected by a general decline in market segments related to the index. Airline Companies may be adversely affected by a downturn in economic conditions that can result in decreased demand for air travel and may also be significantly affected by changes in fuel prices, labor relations and insurance costs.

Fund holdings and allocations are subject to change at any time. Click to view fund holdings for JETS.

Distributed by Quasar Distributors, LLC. U.S. Global Investors is the investment adviser to JETS.