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The CEO of Boeing predicts that a major US airline will go out of business by the end of the year, and that it will take up to five years before the industry recovers from the impact of the coronavirus pandemic.
Speaking on NBC’s Today Show on Wednesday, Dave Calhoun described the current situation for the airline industry as “grave” and “apocalyptic” — but is more optimistic for aviation in the medium to long-term.
Asked if a major US carrier could go out of business when money from the federal government’s bailout runs out in September, leading to lay-offs, Mr Calhoun said: “Yes, most likely. Something will happen when September comes around.”
“Traffic levels will not be back to 100 per cent, they won’t even be back to 25. Maybe by the end of the year we approach 50. So there are definite adjustments that have to be made on the part of the airlines,” he added.
Predicting that the public will eventually return to travelling he said that it was up to the industry to demonstrate the safety of its product and experience.
“We believe we will return to a growth rate similar to the past but it might take us three to five years to get there,”
Confirming that flying would look very different going forward, Mr Calhoun said temperature checkpoints at airports and travellers being required to wear face masks by new regulations, were likely. He added that responsible behaviour by the public was also important.
In terms of how technology might help, Mr Calhoun explained that plane air circulation systems already replace all the air in the cabin every two to three minutes to prevent transmission of airborne diseases.
Boeing, which has already laid off 10 per cent of its workforce, has been planning medium term production over the next three years and believes there is stability there with a smaller footprint than before the virus.
Watch Boeing CEO David Calhoun’s full exclusive interview with @savannahguthrie about what the future of flying could look like, how long it may take the airline industry to recover, how the company is handling problems it faced before the pandemic and much more. pic.twitter.com/IwsMxcK5HT
— TODAY (@TODAYshow)
On investor Warren Buffet selling his US airline stocks believing that people will not fly as much as there are no too many idle aircraft, Mr Calhoun says: “I don’t share the view, I share the near-term turmoil ... Near-term for me doesn’t mean a few months. I believe it’s three full years before we return to the traffic levels we had just in 2019, and probably another two before we return to the growth rates that we had.”
Mr Calhoun took over as CEO at Boeing in January 2020, but has been on the board for a decade.
When asked where the company had gone wrong given the missteps taken in recent years — the tragic crash of two 737-Max aircraft, design problems with the 787, and failures with the space capsule prototype — he said that Boeing has taken a magnifying glass to everything it does to prevent accidents happening in the future.