Business

A major airline will 'most likely' go bust this year because of COVID-19, Boeing CEO says

Boeing Co. CEO Dave Calhoun does not expect flight passenger traffic to reach 25 per cent of its previous level by the end of this summer, forcing airlines to have to make drastic adjustments to their businesses.
David Calhoun says if airlines are lucky, demand for air travel will bounce back to 50 per cent of its previous level by the end of 2020. (Richard Drew/The Associated Press)

Boeing Co. CEO Dave Calhoun does not expect passenger traffic to reach even a quarter of its levels in September, creating the need for airlines to make "adjustments" as they weather the impact of the coronavirus pandemic.

In an interview with NBC to be aired on Tuesday, Calhoun said: "Traffic levels will not be back to 100 per cent. They won't even be back to 25 per cent. Maybe by the end of the year we approach 50 per cent. So there will definitely be adjustments that have to be made on the part of the airlines."

Asked whether there might be a major U.S. carrier that has to go out of business, Calhoun said: "Yes, most likely. You know, something will happen when September comes around."

Airlines have been hit by the COVID-19 pandemic harder than most sectors, as global demand for travel has slowed to a crawl. Major airlines around the world have laid off staff and drastically reduced capacity in response to that plummeting demand.

In response to Calhoun's comment, Boeing spokesman Gordon Johndroe said: "He was speaking to the general uncertainty in the sector, not about any one particular airline."

With files from CBC News

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