Airlines See Clear Skies

For the first time since 2007, industry group, the International Air Transport Association announced that it expects a profit of $2.5 billion in 2010. The IATA reported that traffic is back to pre-recession levels and although recent problems in Europe stemming from the debt debacle and volcano have eaten away at profits, the remaining world market is seeing very strong traffic numbers. The group forecasts passenger traffic to grow by 7.1 percent in 2010 and cargo traffic to grow by 18.5 percent.

Increased consumer confidence and expectations of a growing world economy are helping fuel this recent growth spurt in the airline industry. This has also helped push the Claymore/NYSE Airline ETF (NYSE: FAA) up nearly 9 percent higher year to date. Investment in the airline industry has been one of various highs and lows, often plagued with bankruptcies and strikes. The exchange traded fund, which invests in a basket of airline stocks such as JetBlue Airways (NASDAQ: JBLU), UAL Corporation (NASDAQ: UAUA) and US Airways Group (NYSE: LCC), should continue to see price appreciation as economic conditions improve. The ETF also represents a safer alternative to individual airline investing.

4 Strong Buys From Our Friends at Zacks. See them for free.