Welcome to my latest video presentation. The article below is a condensed transcript; watch my video for additional details and several charts.

The global aviation industry is experiencing a period of remarkable growth and prosperity, driven by a combination of rising passenger demand, increased airline profitability, and expanding aircraft fleets across the world.

As economies recover, pent-up travel demand is unleashing waves of new customers eager to explore both domestic and international destinations. Emerging markets are also seeing a surge in travel, with countries in Asia and the Middle East, in particular, increasing their share of global air travel.

This rise in demand is fueling substantial order backlogs for the global duopoly of European-based Airbus (OTC: EADSY) and U.S.-based Boeing (NYSE: BA), as well as stimulating interest in innovative aircraft designs focused on fuel efficiency and sustainability. Some of the most advanced innovations are occurring in avionics technology.

Later in this presentation, I’ll pinpoint my favorite investment play on the multi-year bonanza of global aviation growth…and it’s not a single company’s stock.

A decade-long upward trajectory…

Airlines are increasingly investing in fleet modernization to meet stricter environmental regulations and reduce fuel costs, creating a further boon for aerospace companies.

New aircraft models, like Airbus’s A321XLR and Boeing’s 777X, are being developed to offer longer range and greater efficiency, aligning with airline strategies to meet evolving passenger needs while cutting operational costs.

However, Boeing continues to face notable challenges despite these tailwinds in the aviation sector. Let’s take a closer look at global aviation trends, from now and 10 years into the future.

The latest forecast from the International Air Transport Association (IATA) estimates that industry revenues will reach an all-time high of nearly $1 trillion this year. Nearly five billion passengers are projected for 2024, surpassing the 2019 count by over 400 million.

According to Precedence Research, the global aerospace market size will account for USD 373.61 billion in 2024, grow to USD 402.75 billion in 2025, and is projected to surpass USD 791.78 billion by 2034, representing a robust compound annual growth rate (CAGR) of 7.8% between 2024 and 2034.

The report’s key takeaways:

• North America contributed more than 46% of revenue share in 2023.
• The Asia-Pacific region is estimated to expand the fastest CAGR between 2024 and 2034.
• By size, the narrowbody segment generated over 78.2% of revenue share in 2023.
• By size, the widebody segment is expected to expand at the fastest CAGR over the projected 10-year period.

These trends are boosting aircraft manufacturing. The new Aviation Week Commercial Fleet and MRO Forecast is considered the “gold standard” of aviation forecasts.

According to the 2025 version of the annual report, released to the public in late October 2024, more than 21,900 new commercial aircraft deliveries will occur worldwide over the 10-year 2025-2034 forecast period. Narrowbody types are projected to lead this growth, with the Airbus A320neo family outpacing the Boeing 737 MAX family.

Among all the new aircraft that are expected to be delivered between 2025 and 2034, 70% will be from the neo and MAX aircraft families.

The Airbus-Boeing duopoly will account for 91% of aircraft deliveries globally over the forecast period. The forecast reveals a 3.1% CAGR fleet growth during the period, with 44,600 aircraft in service by 2033.

We’re witnessing a significant shift, with Airbus increasingly pulling ahead of Boeing. This trend is expected to continue in 2025 and beyond, boosting the base values and lease rates of Airbus aircraft but weighing on those for Boeing aircraft.

From product development setbacks and safety concerns to a changing competitive landscape, Boeing’s regulatory and safety troubles have allowed Airbus to consolidate its lead.

Boeing’s recent leadership changes, including the potential impact of CEO Kelly Ortberg, offer hope for a fresh strategic direction that could help address the company’s issues. However, the problems at Boeing run deep and Ortberg so far hasn’t implemented the radical cultural changes needed to turn around the beleaguered company. The new year will prove pivotal for Boeing.

That said, Boeing’s archrival Airbus faces challenges of its own. Airbus is grappling with supply chain bottlenecks and it has miscalculated in the introduction of some new aircraft models that were expensive to produce but which failed to meet expected demand.

Smaller aircraft makers, notably Brazil-based Embraer (NYSE: ERJ), are challenging the giant OEMs such as Airbus and Boeing with innovative, more fuel-efficient designs, especially in the business/VIP aircraft segment.

Your best bet on the aviation boom…

My favorite play on the aviation trends I’ve just described is the U.S. Global Jets ETF (JETS). This benchmark exchange-traded fund is the simplest, safest way to tap into global aviation’s sky-high profits.

With net assets of more than $1 billion, the JETS ETF is focused on airlines, aircraft manufacturers, and other key players in the aviation ecosystem, making it well-positioned to benefit from the long-term growth trajectory in global commercial aviation.

JETS primarily invests in major airlines (including U.S. and international carriers), aircraft manufacturers, and companies in related sectors like airport services and aircraft leasing. This broad exposure allows investors to capture growth across the entire aviation supply chain, from travel demand to aircraft production.

The JETS ETF includes airline stocks with exposure to hedging strategies, which can help stabilize performance despite fluctuations in fuel costs.

Commercial aviation is a cyclical yet resilient industry. Over the long term, demand for air travel tends to grow alongside gross domestic product (GDP) and global wealth, making JETS a potential long-term portfolio stabilizer. (See my video for several charts, which include a listing of the 25 top holdings in the JETS portfolio.)

JETS has racked up a year-to-date total return of about 27% and a one-year total return of 53.82%. The expense ratio is a reasonable 0.60%.

For investors seeking a straightforward way to capitalize on these tailwinds, the JETS ETF offers diversified exposure to the aviation megatrend.

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John Persinos is the editorial director of Investing Daily.

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