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The airline industry is having an “apocalyptic” moment that could force a major US airline to close, said David Calhoun, Boeing president and CEO, in an interview with Savannah Guthrie on NBC’s “TODAY” show that aired. Tuesday morning.
“The threat to the airline industry is serious. There is no question about it. And the apocalyptic actually accurately describes the moment,” Calhoun said of the coronavirus impact.
The airline industry made record profits for a decade, due to lower jet fuel prices and consolidation through a series of mergers. That ended the coronavirus pandemic, which has devastated the industry and led to a 95 percent drop in demand for air travel. American Airlines, United, Southwest and Delta reported huge quarterly losses, their first in years. Airline executives have said the pandemic is the worst crisis in the industry and compared its impact to the events of September 11.
Despite billions of dollars in emergency funding as part of the government’s CARES Act, the future of the industry remains uncertain, with many airline executives predicting that traffic will not return to previous levels for three to five years, raising questions about the survival of some major carriers
“I don’t want to be overly predictive on that topic. But yes, most likely,” Calhoun said when asked if he thought a major US airline would have to close.
“Something will happen when September arrives. Traffic levels will not return to 100 percent. They will not even return to 25 percent. Therefore, adjustments will definitely have to be made by the airlines,” Calhoun said. said.
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The experience of air travel will be very different, he acknowledged. While he recommended that regulators require face masks, he said that the interior of an aircraft cabin was “designed to prevent the transmission of exactly this type of aircraft carrier.”
“The cabin itself replaces its air every two to three minutes,” he said. “By the time you apply those protections and consider responsible public actions, I think you gradually return to the same level of trust that we have had before.”
Calhoun said on the show “TODAY” that he does not share the same opinion on the future of airlines as billionaire investor Warren Buffet, who recently sold his total $ 4 billion stake in US airlines. Buffett said at the time that he did not believe people would fly as many miles of passengers as they did last year.
“The world has changed for airlines,” Buffett said earlier this month at the annual shareholder meeting for his investment firm, Berkshire Hathaway. “I don’t know if Americans have now changed their habits or will change their habits due to the extended period.”
“I do not share the opinion,” Calhoun told Guthrie. “I share the short-term turmoil. The short-term term for me doesn’t mean a few months. I think it’s a full three years before we return to the traffic levels we had in 2019, and then probably another two before we start to get back to the growth rates we used to have. And I hope that somewhere in between here and there, there’s a vaccine, and the moment of great anxiety is really going to slow down. But I still believe in the future of the industry. “
Guthrie also asked Calhoun about Boeing’s future. The company’s troubled 737 Max aircraft fleet remains grounded around the world after two accidents that led to hundreds of deaths.
“In remembrance of the two accidents, which were as real as can be, our sincere sorrow to all who were affected by those accidents,” said Calhoun.
“We made a bad assumption, regarding the design envelope for that aircraft, at that point in time, under that condition. Our assumption about how a pilot would react in a very tense and difficult time was wrong. Simple as that. But I think it has been fixed. I also believe in the Boeing culture. I really believe that all of our employees deeply believe in safety. And we have brought a magnifying glass to everything we do, everything, so that you never “never allow something like that will happen in the future. “
“I have confidence in the Max,” said Calhoun. “The certification work, the FAA’s work, has been as thorough as anything I’ve seen. We’ve worked on every possible scenario in the testing programs. And it does it extremely well.”
Calhoun also spoke proudly of how “magical” it was for Boeing to assist during the pandemic, delivering emergency supplies on the front line.
“The pilots who fly these planes around the world, to deliver these supplies, is our front line that helps the health care line,” said Calhoun. “It’s pretty magical when it happens, and it’s very motivating for me, of course, but especially for our people. And they need that kind of motivation.”
