Less than a year ago, U.S. airlines were among the stars of the market. The U.S. Global Jets ETF (NYSEARCA:JETS), which is weighted toward U.S. airlines and debuted in May, 2015, had risen about 50% between July 2016 and July 2017, exceeding gains in the Dow Jones Industrial Average. The Jets ETF was solid, and it seemed as if the industry’s problems were behind it.

But since this January JETS has rolled-over, falling 13%. A host of problems with unruly customers, impatient staff and bad equipment have hurt the industry’s image just as jet fuel prices start to feel the squeeze from $75 per barrel oil.

Traffic and profitability are up but congestion, fear, labor unrest and passenger craziness are all rising. It’s likely the industry will have to take a profit pause to install technology and infrastructure to handle its recent success, making the airline stocks less of a slam-dunk for investors.

Falling Skies

Southwest Airlines Co. (NYSE:LUV), which had been the industry’s lead horse this decade, saw its stock falling even before a woman lost her life on an April 17 flight to Dallas after an engine part broke off and broke a window in the cabin. The airline is now inspecting all its planes.

The incident broke a record of over four years without a single U.S. airliner fatality, a remarkable achievement considering that there are 855 million “enplanings” in this country each year while over 37,000 people are killed in traffic accidents.

But the growth of the industry, and the assumption of safety, have brought the system to crisis.

Whether they’re attacking air marshals at Delta Air Lines Inc. (NYSE:DAL), starting fights to get themselves pulled off at American Airlines Group Inc. (NYSE:AAL), or claiming a peacock necessary for emotional support at United Continental Holdings Inc. (NYSE:UAL), passengers are treating airlines like buses, and dirty buses at that.

Employees are also getting vocal. They’re unionizing at JetBlue Airways Corp. (NASDAQ:JBLU) and at United they just don’t seem to care, leading board chairman Robert Milton to leave and CEO Oscar Munoz to see his 2017 salary cut in half.

As Good as It Gets for Jets ETF

Despite the bad headlines, the current quarter should not be bad for airline stocks, which bodes well for Jets ETF. Delta reported Delta reported a 4.3% rise in Passenger Revenue per Average Seat Mile (PRASM), a key profitability measure, and the tax cut has allowed for more stock buybacks, dividends and even some profit-sharing with employees.

But the tax cut is a one-time thing, and the need to invest is continuous. This includes biometric technology for screening passengers, integrating technology systems for acquisitions at Alaska Air Group Inc. (NYSE:ALK) or buying new seats without foam that can be cut.

Will Jets ETF Fly?

By focusing on U.S. airlines, the managers of the Jets ETF have managed to deliver more profitability to investors than other airline ETFs have gotten. It helps that in addition to the airlines themselves Jets is a big holder of Boeing Co (NYSE:BA), which is up 16% so far in 2018, after gaining 89% in 2017.

But problems for the industry are starting to stack up, like planes over an airport with weather problems. Rising costs, rising ire, and growing investment needs are all conspiring against the Jets ETF.

It may be time for everyone involved in the industry – labor, management, and passengers – to take a few deep yoga breaths and focus on improving the quality of the experience, even at the expense of margins, or the next crash could be financial.

Dana Blankenhorn is a financial and technology journalist. He is the author of the historical mystery romance The Reluctant Detective Travels in Time, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this story.