Boeing CEO: Coronavirus likely to cause a major airline to go out of business
Traffic levels won't 'be back to 25 percent' by September, Calhoun said
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Boeing CEO David Calhoun said Tuesday that at least one airline is likely to fold as a result of the challenges the coronavirus pandemic has brought upon the airline industry.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BA | THE BOEING CO. | 143.41 | -2.67 | -1.83% |
Major airlines have taken a huge hit due to a reduction in travel brought on by the outbreak of the virus, which forced people worldwide to observe stay-at-home orders and brought air traffic to a standstill.
"I don't want to get too predictive on that subject. But yes, most likely," Calhoun told NBC's "Today" show, when asked about the possibility of a major U.S. airline going out of business.
American Airlines Boeing 777-200ER banking left after taking off from El Prat Airport in Barcelona, Spain. / iStock
He added that "something will happen when September comes around," and airline traffic levels won't "be back to 25 percent" by that time. "There will definitely be adjustments that have to be made on the part of the airline," he said.
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Calhoun told FOX Business' "Mornings with Maria" last week that it could take years for the aviation industry to return to normal traffic levels and resume growth.
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"If I survey all of our customers and I start here in the U.S., and of course we do ... most are trying to dial in a return of about 30 [percent] to 50 percent by the end of this year," Calhoun said. "A lot's going to depend on how the public responds to the safety of airline cabins, etc."
Members of Delta's line maintenance crew disinfect the surfaces of the cabin including tray tables, seat backs and in-flight entertainment screens in a Boeing 757 in Atlanta, Ga., on Friday, March 6, 2020. (Chris Rank for Rank Studios)
Calhoun also said last week that unless a vaccine is developed soon and widely distributed, it will take about three years to "slowly crawl back to the traffic levels" the industry experienced in 2019. It will then take "another two years to get back on the growth curve that the industry has enjoyed for almost two decades."
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The $2.2 trillion CARES Act set aside $25 billion in grants and loans for U.S. airlines, and about 90 percent of that money is expected to go to the nation’s six largest airlines – American, United, Delta, JetBlue and Southwest – according to a Reuters report that cited people familiar with the matter. About 275 companies have applied for the aid.
Boeing said on April 30 that it would not be applying for the aid after raising $25 billion in a bond offering.