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Current Views

April 8, 2010: Why We Are Bullish On The Airline Sector

We have recently become more bullish on the airline sector, as we see both cyclical and secular drivers which appear likely to enhance the potential earnings power of the industry. Over the last several months, key metrics for the airlines have displayed a very positive trend. Traffic growth (demand) has shown steady year over year improvements, while capacity growth (supply) has been muted. Improvements in GDP and corporate profits have driven the demand side of the equation and are expected to continue going forward. The result of this supply/demand dynamic has been increased pricing power for the airlines, which has been clearly demonstrated as unit revenue growth metrics have strengthened considerably. From a longer term perspective the supply side of the equation looks favorable as well. The industry has experienced meaningful consolidation in recent years, and more airlines have been joining the three major global alliances. Furthermore, domestic airlines have been very disciplined with regards to ordering new aircraft. With both major aircraft manufacturers sold out over the next few years, capacity growth in the US should remain muted. We are therefore enthusiastic about the prospects for the space and have added to our portfolios accordingly.



This information is intended solely to report on investment strategies and opportunities identified by Roosevelt. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. References to specific securities and their issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities. Please contact us at 646-452-6700 if there is any change in your financial situation, needs, goals or objectives, or if you wish to initiate any restrictions on the management of the account or modify existing restrictions, or if you would like to request a copy of our Code of Ethics. Our current disclosure statement is set forth on our Form ADV Part II, available for your review upon request, and on our website, www.rooseveltinvestments.com.

Past performance is not a guarantee of future results. Indices are unmanaged and cannot accommodate direct investment. Themes assigned as per Roosevelt Investments’ evaluation. Risk tools may include cash or other securities that we believe possess a low or inverse correlation to the overall market.


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The Roosevelt Investment Group, Inc. is an independent investment management firm that is not affiliated with any parent organization. The Roosevelt Investment Group, Inc. manages equity, fixed income, and balanced assets for primarily U.S. clients. The Roosevelt Investment Group, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission and notice filed in all 50 states.

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