A higher number of Americans are gearing up for the summer travel season this year encouraged by accelerated job gains, moderate wage growth, and cheap fuel that will lead to more trips through road and air. With just a few days left for the sunny season, the frenzy for trips during the holidays is really more this time than in many years.

In fact, the latest survey from GasBuddy.com shows that drivers are expected to pay the lowest gasoline price since 2005. The average national price of gasoline is $2.23 per gallon currently, down 50 cents per gallon from last year. As a result, GasBuddy.com expects more than 75% of the Americans to travel this summer, up 2.2% from last year. Of this 79% will be traveling by car (read: Oil Rally Likely to Continue: ETFs & Stocks to Watch).

Another report from the U.S. airlines group, Airlines for America (A4A), shows that air travel is expected to reach an all-time high this summer (June–August), though travelers could face longer airport security lines. About 231 million passengers (2.51 million per day) would fly over the three-month period, up 4% from last year. Out of these, 30.5 million travelers (331,000 per day) will board international flights.

In order to accommodate an increased number of passengers, the U.S. airlines will likely add new flights and increase the number of seats. A4A expects airlines to offer 109,400 more seats compared to last summer, bringing the total to 2.78 million seats a day.

Huge travel demand should boost revenues and profitability for the airlines and railroads, thereby leading to higher share prices. Investors’ shouldn’t miss this opportunity and could tap this trend through ETFs and stocks that stand to profit big time from the upbeat summer travel trend.

How to Play with ETFs?

Below, we have highlighted three ETFs that belong to the transportation world and could see immense upside in the coming months, although a couple of them have a Zacks ETF Rank of 4 or ‘Sell’ rating.
 
iShares Dow Jones Transportation Average Fund (IYT – ETF report) 
 
The ETF provides exposure to the broad transportation sector by tracking the Dow Jones Transportation Average Index. The fund holds a small basket of 20 stocks with heavy concentration and dominance in the top 10 holdings. Air freight & logistics takes the top spot at 30.4% while railroads, airlines and trucking round off the next three spots with a double-digit allocation each. The fund has accumulated $505.2 million in its asset base while sees a good trading volume of around 358,000 shares a day. It charges 45 bps in fees and expenses (read:Burst of Earnings Surprises Fails to Drive Transport ETFs).
 
SPDR S&P Transportation ETF (XTN – ETF report)