ORIGINAL: snitch
I read once in an aerodynamic textbook that the effect of winglets is over-stated, and that much the same reduction in drag and increase in lift can be gained by increasing aspect ratio. Whether that's true, or over-simplified, I don't know.
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That's winglets in a nutshell... as span is usually restricted by structural considerations once the plane is made, adding the aspect ratio by going vertical makes it less of a structural problem.... less of an added bending load on the wing.