Please ensure Javascript is enabled for purposes of website accessibility

Boeing CEO Sees Airline Capacity at Only 25% by September

By Howard Smith - Updated May 12, 2020 at 4:41PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

He predicts the possibility of a major airline going out of business due to the COVID-19 pandemic impacts.

Boeing (BA -3.13%) president and CEO Dave Calhoun said he thinks airline passenger traffic levels will only be at 25% around September, in an interview with NBC News. Calhoun went on to say, "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," according to a CNBC report. 

In its April 14, 2020, assessment of the state of the industry, the International Air Transport Agency (IATA), a trade association for the world's airlines, said the COVID-19 pandemic would cause passenger revenue to drop 55% compared to 2019, or up to $314 billion.

lone traveler sits at airport with head in hands

Image source: Getty Images.

According to the report, Calhoun also said he believes a major U.S. airline will go out of business because of the crisis. A company spokesman later clarified that he was speaking on the uncertainty of the sector in general, and not about a particular airline. 

The U.S. airlines have been announcing new protocols and safety requirements in an attempt to make customers more comfortable returning to travel. These have included requirements for passengers and workers to wear masks, increasing cleaning practices in airports and on planes, and in some cases employee temperature checks. 

Airlines have also been trying to make the adjustments that Calhoun suggested. A lobbying group for many major airlines recently said in a statement to a congressional committee that airlines should be granted waivers on minimum service route requirements. Many mandatory routes lack demand and that service is an "unsustainable requirement," exacerbating liquidity issues, according to the trade group Airlines for America. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Boeing Company Stock Quote
The Boeing Company
BA
$166.69 (-3.13%) $-5.39

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
402%
 
S&P 500 Returns
129%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.