Boeing CEO Dave Calhoun said he believes a major U.S. airline will go out of business this year because of the ongoing disruption brought on by the coronavirus pandemic.
“I don’t want to get too predictive on that subject, but yes, most likely,” he said in an interview that aired Tuesday on NBC’s “TODAY” show. “You know, something will happen when September comes around.”
Calhoun did not provide specifics and Boeing spokesman Gordon Johndroe said that Calhoun “was speaking in general about the uncertainty in the sector not about any one particular airline.”
Airlines last month started receiving portions of $25 billion in federal grants and loans that prohibit them from laying off or cutting the pay rates of their employees until Oct. 1. Airline executives have warned they expect to become smaller airlines because of the lack of demand.
U.S. airlines recently posted their first quarterly losses in years as passenger demand crumbled because of the coronavirus and measures to stop it like stay-at-home orders.
In recent comments, airline executives said the worst might be over but they don’t expect a sudden recovery in demand. The Transportation Security Administration said 215,645 passed through U.S. airport security checkpoints on Monday, the highest since March 25, but still down more than 91% from a year ago.
Calhoun last month said he expects a recovery in traffic to take three years, comments he reiterated on the “TODAY” show, adding that it likely won’t recover to a quarter of normal levels by September.
“Traffic levels will not be back to 100%. They won’t even be back to 25%,” Calhoun said in the interview, referring to September. “Maybe by the end of the year we approach 50%. So there will definitely be adjustments that will be have to be made on the part of the airlines.”
The coronavirus is an additional challenge for Boeing, already struggling with the 14-month grounding of the 737 Max plane, its bestseller. Weaker airlines mean weak new orders and the potential for cancellations.
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Clarification: Calhoun’s comments to “TODAY” were aired Tuesday but were recorded earlier.