Key Highlights

  • MAX Airlines -3X Inverse ETN rose 6.84% to $4.04 as screened on Friday, October 23.
  • The implied move in the Prime Airlines Index is a fall of roughly 2.28% (calculated, before fees).
  • Delta's fuel expense rose 62% to $4.1 billion in its September quarter, and its full-year fuel bill rises about $6 billion.
  • United guided fourth-quarter adjusted earnings of $0.50 to $1.50 against a $1.76 average estimate.
  • Alaska guided to a fourth-quarter adjusted loss of $2.00 to $2.50 a share.

JETD Gain: Why Did a -3X Airline Note Rise 6.84% on October 23?

MAX Airlines -3X Inverse ETN (NYSEARCA:JETD) rose 6.84% to $4.04 as screened on Friday, October 23. Dividing by the factor of three, the screen implies the Prime Airlines Index fell about 2.28%, calculated and before fees. The answer lies in the fuel bills and guidance cuts that airlines have reported over the past two weeks.

The Product: What Does the Prime Airlines Index Hold?

The note is a MAX-branded exchange-traded note on NYSE Arca, launched on June 23, 2023, with a 0.95% annual fee and about $5.79 million in assets. It follows 19 US-listed companies in air transportation, including airlines, airfreight and logistics, and aircraft and parts makers, chosen by market value and weighted by liquidity.

That breadth means a share of the basket may behave differently from pure carriers, so the index move implied by the screen is a blended figure.

Carrier Results: How Big Is the Fuel Shock in the Numbers?

Delta Air Lines (NYSE:DAL) reported adjusted earnings of $1.72 a share on October 9, below its $2.00 to $2.50 guide, on record revenue of $17.6 billion, up 16%. Its fuel expense rose 62% to $4.1 billion, and it cut full-year earnings guidance to $5.10 to $5.60 from $6.50 to $7.50.

United Airlines (NASDAQ:UAL) guided fourth-quarter adjusted earnings of $0.50 to $1.50 on October 20, with fuel near $4.80 a gallon, about 45 cents above estimates. Alaska Air (NYSE:ALK) projected a fourth-quarter adjusted loss of $2.00 to $2.50 a share and a $1.8 billion higher fuel bill.

American Airlines (NASDAQ:AAL) reported on October 22 an adjusted loss of $0.28 against a $0.36 loss expected, with revenue up 19.3% to $16.3 billion. It guided to a fourth-quarter loss of $0.50 to $1.10 on fuel near $4.70, adding $2.8 billion of cost, and said 2027 network growth would slow.

Oil and Geopolitics: Why Is Jet Fuel So Expensive?

Dec Brent stood near $111.70 on October 22, up 2.65%, after reports of attacks on shipping in the Gulf and a strike on a Saudi oil field. Gulf Coast jet fuel was $4.632 a gallon on October 20, compared with about $2.19 a year earlier. September CPI showed airline fares up 22.4% from a year earlier, so revenue is rising but not enough to offset costs.

American's shares closed up 2.98% on October 22 after the report, a reminder that daily airline moves can contradict the fundamental backdrop.

Reset Risk: How Do -3X Airline Notes Behave After Sharp Days?

A calculated example shows the effect: if the airline index rises 2.28% and then falls 2.28%, it ends 0.05% lower, while a -3X note would end roughly 0.47% lower after daily resets. Airline stocks routinely move several percent on oil headlines, which magnifies that drag. This article is informational only.

What to Watch Next: Which Events Could Shift Airline Stocks?

The Federal Open Market Committee meets on October 27 and 28, and the October jobs report arrives on November 6. Weekly oil and fuel data remain the main driver.