Boeing's CEO, flush with fresh capital (read: debt) for his business, is now starting to make the rounds on the company's redemption tour. The coronavirus put the 737 MAX scandal in the proverbial rear-view mirror and Boeing was able to raise $25 billion to keep itself in business with the U.S. economy at a total shutdown.
As part of CEO Dave Calhoun's PR tour, he participated in an interview with NBC that will be aired tonight. In it, he predicts that a major U.S. airline will fold as a result of the economic pressure.
"The recovery is going to be slow, with air traffic languishing at depressed levels for months," Calhoun predicted, according to Bloomberg. When asked if a major airline would fold, he replied "Yes, most likely."
He continued: “Something will happen when September comes around. Traffic levels will not be back to 100%. They won’t even be back to 25%. Maybe by the end of the year we approach 50%. So there will definitely be adjustments that have to be made on the part of the airlines.”
September is when the government's payroll aid to the airline industry is set to expire.
Demand for flights has collapsed and Boeing is actively working to shrink its business as its customers (the ones who stuck around after the 737 MAX crisis, that is) are delaying orders and tightening their belts.
Calhoun believes that air travel won't go back to "pre-pandemic normal" levels until the middle of the decade. Boeing has announced plans to lay off 16,000 workers and slow production, as a result. Regarding his comments, a Boeing spokesperson said he was “speaking to the general uncertainty in the sector, not about any one particular airline.”
Calhoun's predictions fall in line with that of Warren Buffett, who recently sold his stake in U.S. airlines and predicted that a recovery in the industry would be long and arduous.