Stanley Druckenmiller is buying US Airline Stocks, believing that the global aviation sector could benefit from Trump-era foreign policy to facilitate an end to the Ukraine war, the worst war on the European continent since WW2.
Last month, Duquesne Family Office Chairman Stanley Druckenmiller spoke about animal spirits returning to the market driven by what most CEOs saw as a business-friendly administration that will cut red tape.
“We are probably going from the most anti-business administration to the opposite,” he recently said.
But, in the past month, sentiment shifted from euphoria to fears of tariffs and their potential impact on global supply chains, with many of the Trump trades stalling.
“Stanley Druckenmiller is buying US Airline Stocks, believing that the global aviation sector could benefit from Trump-era foreign policy to facilitate an end to the Ukraine war”
WEALTH TRAINING COMPANY
13F filing confirms Stanley Druckenmiller is buying US Airline Stocks, making big bets that they will make a comeback
“Druckenmiller’s investment firm disclosed 21 new positions in stocks, including United Airlines, American Airlines and Delta Air, in the final quarter of 2024. United Airlines was his largest new buy, amounting to 2.8% of his overall portfolio. The purchases come as the hedge fund reduced its stake in the technology sector by 5.3%,” Bloomberg.
Last quarter, George Soros’ former money manager also piled into airline stocks, including United Airlines, American Airlines, and Delta Air Lines.
The global aviation sector is forecast to continue expanding in the foreseeable future, thanks to rising population, higher income per capita across geographies and continuous economic development between regions. The growing demand for air travel will drive up the fuel use.
Implied jet fuel demand worldwide has remained above average in the last four years.
Domestic flights are accelerating in the second half of February.
According to figures released by the Transport Security Administration (TSA), airport checkpoint data remains above a four-year average for this time of year as spring flying season nears.
“Druckenmiller’s investment firm disclosed 21 new positions in stocks, including United Airlines, American Airlines and Delta Air”
BLOOMBERG
But TSA’s bullish data, the Dow Jones US Airlines Index (DJUSAR) is showing above-average weakness compared to other Dow Jones industry groups.
Perhaps that is because the Airlines Index (DJUSAR) took off last year in 2024 with a record-smashing 57% increase.
Moreover, the S&P Supercomposite Airlines Index comfortably outperformed the SPDR S&P 500 ETF Trust despite the latter 26% jump.
So, the US Airlines Index (DJUSAR) experienced its best annual performance since 2014 and its best margin of outperformance over the broader market in a decade.
“Stanley Druckenmiller’s trading/investment style is similar to George Soros’s as both investors hold a portfolio of long and short stock positions and use leverage to trade futures and currencies” – Wealth Training Company
Stanley Druckenmiller is buying US Airline Stocks as the airline index fell sharply in February
The upward momentum in the US Airlines Index has not continued into Q1 of 2025.
In the past month, the Dow Jones US Airlines Index INDEXDJX: DJUSAR fell by 10,52 % to 222.38 at the time of writing and, on the last day close, fell 5.45%.
Stanley Druckenmiller is buying US Airlines stocks, which could suggest that he views these recent falls as a buying opportunity
So his large bets on US Airlines could be flagging an Index down on profit-taking due to 2024 stellar results. In other words, it could be a short-term bear market in a long-term secular bull market. That view is credible.
Stanley Druckenmiller started his financial career as an oil analyst for Pittsburgh National Bank.
He then founded his firm, Duquesne Capital Management, in 1981 and was hired by George Soros seven years later to replace Victor Niederhoffer at Quantum Fund.
Stanley Druckenmiller’s trading/investment style is similar to George Soros’s as both investors hold a portfolio of long and short stock positions and use leverage to trade futures and currencies. In early 2019, Stanley Druckenmiller held sizable positions in Microsoft, Abbott Laboratories, Salesforce.com, Delta Airlines, and American Airlines.
Stanley Druckenmiller’s trading success has had its share of ebbs and flows. In 2000, he left Soros after taking heavy losses in technology stocks.
“Elon Musk, the head of new Department of Government Efficiency DOGE, one month into being is claiming $55 billion in cuts already, but that is just the tip of the iceberg” – Wealth Training Company
Fast forward two and a half decades, Stanley Druckenmiller is buying US Airline Stocks and reducing his stake in the technology sector by 5.3%, according to his latest 13F filings
The S&P 500 continues to make record highs, driven by AI and making America Great Again MAGA themes. Meanwhile, as explained above, airline stocks remain major laggards but have not been dismissed by Stanley Druckenmiller. His bet is based on a tall order that the Trump administration and the Fed can keep inflation anchored, restore economic certainty while maintaining economic growth, and stabilize geopolitical tensions in Eastern Europe and the Middle East.
If those investor fears are placated, then maybe airlines could be on the tarmac ready for takeoff.
Stanley Druckenmiller is buying US Airline Stocks, and here is the other view that doubts it is a good bet
What if February’s sell-off in the US Airlines Index INDEXDJX: DJUSAR is not due to profit-taking but the beginning of a sharp correction or even a crash?
Stagflation can not be ruled out, as policymakers implement fiscal and monetary contraction.
Elon Musk, the head of new Department of Government Efficiency DOGE, one month into being is claiming $55 billion in cuts already, but that is just the tip of the iceberg.
Musk recently appeared on stage with a chainsaw, symbolizing more future cuts, and has an ambitious goal for $500 billion in DOGE cuts by next July.
Keynesian contractionary fiscal policy is a potential headwind on GDP and employment.
Meanwhile, rising treasury bond yields imply that bond investors see inflation expectations as unanchored, which has pivoted the Fed narrative to wait and see for future rate cuts.
But, with Q4 GDP at 2.3% and the current Fed fund rates of 4. 25 to 4.5%, those Fed fund rates are also in contractionary territory, despite last year’s 100 basis points Fed rate cuts.
The Fed also did 42 billion dollars of QT in January.
Finally, what if President Trump’s maverick foreign policy backfires and Russian tanks embark on an adventurous European tour?
So Stanley Druckenmiller is buying US Airline stocks, but is it a good bet?
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