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Boeing CEO fears pandemic will force major US airline to collapse


“We currently believe each of the larger US airlines have enough capital to survive the year,” although “anything is of course possible,” said Helane Becker, an analyst at Cowen & Co. “We believe if demand stays down 90 per cent through year-end with no sign of recovery, a bankruptcy filing would be more likely to occur in early 2021.”

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Boeing fell 2.9 per cent to $US125.22 in New York.

The CEO “was speaking to the general uncertainty in the sector, not about any one particular airline,” Boeing spokesman Gordon Johndroe said in response to the NBC interview.

‘Apocalyptic’ moment

When NBC’s Guthrie said an unnamed airline executive had described the situation as “apocalyptic,” Calhoun agreed that the short-term outlook was grim.

“‘Apocalyptic’ does actually accurately describe the moment,” he said.

The airline industry will rebound after the “near-term turmoil,” but the comeback will take years, he said.

“Near-term, for me, doesn’t mean a few months,” he said. “I believe it’s three full years before we return to the traffic levels that we had just in 2019 and probably another two before we return to the growth rates that we used to have.”

Still, Boeing is confident enough in the medium-term outlook – over the next three years or so – to plan aircraft production, Calhoun said. Analysts have questioned whether the cuts the company has outlined are deep enough to reflect the expected airline shakeout.

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The airline industry will gradually rebuild passenger confidence in travel with measures such as airport screening for fevers and illness, he said. And for passengers worried that airplane cabins are flying petri dishes, the Boeing CEO highlighted the air-filtering systems on jetliners.

“Believe it or not, that cabin replaces its air every two to three minutes,” he said. That system “was designed to prevent transmission of exactly this kind of airborne carrier.”

Bloomberg

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