Insights

Southwest Airlines, a Top Holding in JETS, Announces New CEO

February 9, 2022

Southwest Airlines said goodbye to Chief Executive Gary Kelly the first week of February, after a 17-year run at the company. Although Kelly will stay on as executive chairman, Bob Jordan has stepped up to take over the role as CEO.

Jordan, who has 34 years of experience working at Southwest, is faced with guiding the company out of the COVID pandemic after two difficult years.

In the last quarter, Southwest announced its first profit of the pandemic, without government assistance.

According to CNBC, Jordan has a few important challenges to work on as CEO: a surge in expenses (from salaries to fuel), strained relationships with labor and a slow return to business travel. Joran told the news outlet that it has already dialed back its growth plans slightly.

“If we need to, and I’m not predicting we will, we’ll continue to moderate our capacity because we are going to have a reliable operation for customers,” Jordan explained.

Another point of focus for Jordan is to keep what’s working well and improve the things that need improvement. For example, Southwest will keep key policies like not charging ticket change fees or for checked baggage, the article continues.

However, one thing Jordan does want to improve on for customers is better technology, which travelers are demanding – from reliable WiFi onboard to self-service through smartphone apps.

“We’ll be investing in all of that,” Jordan said.

Southwest Airlines is one of the top four holdings in the U.S. Global Jets ETF (JETS). The JETS Index weights the top four American carriers at 10% each. This is based on a combined ranking of market capitalization, average dollar value traded and passenger load factor.

Southwest shares the top four positions with Delta Air Lines, United Airlines and American Airlines.

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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.

The U.S. Global Jets Index seeks to provide access to the global airline industry. The index uses various fundamental screens to determine the most efficient airline companies in the world, and also provides diversification through exposure to global aircraft manufacturers and airport companies. The index consists of common stocks listed on well-developed exchanges across the globe. It is not possible to invest directly in an index.

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.