The airline industry has been the hardest hit by the COVID-19 pandemic, which resulted in social distancing and disrupted air travel. The trend seems to be reversing lately with easing of restrictions, reopening of the economy, and new safety measures that have led to the resumption of flights in many countries.

This is especially true as U.S. Global Jets ETF (JETS - Free Report), the one ETF dedicated to the airline industry, was the best performer over the past week, having gained nearly 17%. Here are some insights into the solid performance.

Memorial Day Travel Ticks Up

Air travel bumped up over the Memorial Day weekend to levels not seen since plummeting in March when stay-home orders took effect across most of the United States. More than 1.5 million passengers passed through airport security checkpoints during the Memorial Day weekend. Though this is just a fraction of 12.2 million people who flew during the same period in 2019, it is the strongest number since late March and indicates a solid revival in airline business from the lows seen in mid-April.

In particular, the Memorial Day weekend was the busiest travel period for American Airlines (AAL - Free Report) since Mar 21. The carrier said that the traffic was 320% better during May 22 through May 25 than April 10-13, when it saw the worst of the pandemic. Meanwhile, Southwest Airlines (LUV - Free Report) is expecting improved business in May and June.

European Comeback

Some European countries are easing travel restrictions. Italy plans to allow travel between select European countries starting Jun 3. Germany and Greece plan to resume flights on Jun 15, while Spain will lift the mandatory two-week quarantine for overseas travelers starting Jul 1.

Summer Travel Optimism

Airlines in many parts of the world are planning to resume flights starting next month. Air China is expected to operate 24 international routes between Jun 1 and Jul 1 while Air France is planning to increase its flight schedules during June. Alitalia has announced plans to ramp up services next month, including the resumption of its nonstop Rome-New York routes from Jun 2. It will operate 30 routes to 25 airports (15 in Italy and 10 abroad), offering around 36% more flights than in May.

Philippine Airlines plans to fly a reduced number of weekly flights on “most” domestic routes and “selected” international routes starting Jun 1. Korean Air is planning to resume flights to 19 international routes on Jun 1, including Washington, D.C., Seattle, Vancouver, Toronto, Frankfurt, Singapore, Beijing, and Kuala Lumpur. Qatar Airways plans a summer schedule to more than 80 destinations worldwide by June. Emirates has announced its plan to operate scheduled flight services from May 21 to nine destinations: London Heathrow Frankfurt, Paris, Milan, Madrid, Chicago, Toronto, Sydney, and Melbourne (subject to government approval). Ryanair is planning to reinstate some 40% of its flights over the course of summer, beginning in June.

Delta Airlines (DAL - Free Report) has added about 100 daily flights in June. Easyjet is planning to resume some services in June. United Airlines (UAL - Free Report) is planning to resume four flights to Beijing, Chengdu, and Shanghai next month. Additionally, Southwest Airlines announced summer travel sale by launching a month-long fare sale with one-way fares from $49 to $99. It will also offer double frequent flyer points to travelers who buy tickets during the sale, which covers travel between May 26 and Aug 31.

JETS in Focus

This fund 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. In total, the product holds 34 securities and charges investors 60 bps in annual fees. The fund has gathered $951.1 million in its asset base while sees solid trading volume of nearly 1.6 million shares a day. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook.

From a year-to-date look, the ETF is down 49.2%. However, given the resumption of a higher number of flights ahead of the peak summer travel season, airline stocks and ETF are set to rebound strongly.