Since oil prices have come off their peak last summer, airlines have been flying high.

Along those lines, the Claymore/NYSE Arca Airline (NYSE Arca: FAA) exchange-traded fund launched on Monday. It marks the first airlines-specific ETF and comes after last year's debut by Claymore of another transportation-themed fund. That was the Claymore/Delta Global Shipping ETF (NYSE Arca: SEA).

But in the transportation space, both still have to contend with a more established rival—the iShares Dow Jones U.S. Transportation (NYSEArca: IYT), with some $276.2 million in assets. By comparison, SEA has attracted less than $15 million, and the PowerShares Global Progressive Transportation Portfolio (NASDAQ: PTRP) just $1.6 million.

The more-diversified transportation sector ETFs hold relatively small slivers of passenger air carriers, which is FAA's whole focus. For example, IYT has a total of about 7.6% of its assets in airlines.

In the past, such diversity has actually proved beneficial for transportation-themed ETFs as soaring fuel costs and slumping consumer demand have hit passenger airlines hard. 

Just look at Continental Airlines. Last year, it followed up a 46% loss in 2007 with close to a 19% fall.

But in the past three months, the company's shares have climbed nearly 9%—just the opposite of the broader U.S. equities market.

Continental is still a long way from its glory days. Just four years ago, it returned nearly 58% and in 2006 gained 94%.

Needless to say, the airlines industry can be a bit volatile. But coming out of a deep crater, some traders are betting airlines as a whole will leap out of recession and become a leader once economic times start to improve.

Blue Skies... 

Clearly, FAA will soar as a trading vehicle when transportation skies are blue. But with an expense ratio of 0.65%, it's going to be flying at a slight premium to the broader IYT's 0.48% annual ER. 

“Passenger airlines make up the vital networks by which the world connects itself, and we are happy to be the first ETF provider to offer investors access to a portfolio of some of the most actively traded global passenger airline stocks,” said Christian Magoon, Claymore's president, in a statement announcing the launch. 

The Claymore ETF is a pure-play modified market-cap-weighted passenger airline ETF that will be rebalanced quarterly. FAA holds 25 global airline stocks, 70% domestic and 30% international. The top three stocks in each category will be weighted 15% in the case of domestic, and 4.5% in the case of international airlines. All holdings must derive at least 50% of their business from passenger airline activity.

Some 70.1% of FAA's holdings are in U.S. stocks with another 4.7% in Germany. The remaining markets represented, in order, are: Singapore (4.3%); France (3.7%); Ireland (2.8%); Britain (2.3%); Japan (2.2%); Canada (1.6%); Brazil (1.4%) and Australia (1.4%).

Continental is its top name, at 14.8% of assets, followed by: Southwest (11.8%); AMR (11.1%); UAL (5.5%) and Deutsche Lufthansa (5%).

But whichever way you go in transportation—whether it's more diversified or more specialized, along the lines of FAA—you're going to have to face concentrated portfolios. Of the four perhaps most recognized transportation ETFs now on the market, the biggest is PTRP's 38-stock portfolio. IYT has just 21 different holdings and SEA swims with about 30.