Who will survive this and be here in 6 months ?
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Boeing CEO predicts coronavirus pandemic will claim a major U.S. airline. He didn't name names
Dawn GilbertsonUSA TODAY
9:11 pm May 11, 2020
With anemic passenger counts and no signs travel will rebound quickly from the coronavirus pandemic, airlines are fighting for their financial lives.
They're looking everywhere but the couch cushions to raise badly needed cash and the threat looms of major layoffs this fall.
Boeing CEO David Calhoun thinks one major U.S. carrier won't survive.
Calhoun, who replaced the plane maker's longtime CEO in January in the wake of the prolonged 737 Max crisis, made the prediction to NBC "Today" co-anchor Savannah Guthrie.
Guthrie, in an interview scheduled to air on the network Tuesday, asked Calhoun if "there might be a major U.S. carrier that just has to go out of business?''
"Yes, most likely,'' Calhoun said.
He didn't name names or define "major" airline in the 22-second snippet NBC shared ahead of the full interview.
Calhoun told Guthrie passenger traffic levels will not be back to 100% by this fall, when payroll protection for employees under the CARES Act runs out. Airlines have said they will have to cut payroll costs to survive if business doesn't rebound by then.
"They won't even be back to 25 (%),'' Calhoun said. "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.''
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did you watch it ? anything interesting ? in an interview to Richard quest in CNN Al Baker on Monday , CEO from Qatar declared it will take at least 3 years for Qatar airways to rebound How to weather the storm is the critical thing for any airline today .
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Excellent new editorial from IFALPA on the future post Covid-19 :
https://www.ifalpa.org/media/3536/so...1-may-2020.pdf
https://www.ifalpa.org/media/3536/so...1-may-2020.pdf
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Excellent new editorial from IFALPA on the future post Covid-19 :
https://www.ifalpa.org/media/3536/so...1-may-2020.pdf
https://www.ifalpa.org/media/3536/so...1-may-2020.pdf
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The follow-up article to the airing of the interview is below. In the lede of the video in the article link the announcer proudly boasts that the prediction in Ms. Guthrie's inverview of Mr. Calhoun sent shockwaves through Wall Street and airline offices.
Coronavirus pandemic could force a major U.S. airline out of business, says Boeing CEO
"Something will happen when September comes around. Traffic levels will not be back to 100 percent. They won't even be back to 25 percent. So there will definitely be adjustments that have to be made on the part of the airlines," David Calhoun said.May 12, 2020, 7:53 AM EDT
By Lucy Bayly
The airline industry is having an "apocalyptic" moment that could force a major U.S. carrier out of business, said David Calhoun, president and CEO of Boeing, in an interview with Savannah Guthrie on NBC's "TODAY" show that aired on Tuesday morning.
"The threat to the airline industry is grave. There's no question about it. And apocalyptic does actually accurately describe the moment," Calhoun said of the impact of the coronavirus.
The airline industry raked in record profits for a decade, due to lower jet fuel prices and consolidation through a series of mergers. That ended with the coronavirus pandemic, which has devastated the industry and has led to a 95 percent drop in air travel demand. American Airlines, United, Southwest and Delta all reported huge quarterly losses, their first in years. Airline executives have said the pandemic is the industry’s worst crisis, and have 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 for the industry remains uncertain, with many airline executives forecasting traffic will not return to prior levels for three to five years, leading to questions about the survival of some major carriers.
"I don't want to get too predictive on that subject. But yes, most likely," Calhoun said when asked if he thought a major U.S. carrier would have to go out of business.
"Something will happen when September comes around. Traffic levels will not be back to 100 percent. They won't even be back to 25 percent. So there will definitely be adjustments that have to be made on the part of the airlines," Calhoun said.
The air travel experience will be very different, he acknowledged. While he recommended that regulators require face masks, he said the interior of a plane's cabin was nonetheless "designed to prevent transmission of exactly this kind of airborne carrier."
"The cabin itself replaces its air every two to three minutes," he said. "By the time you layer those protections, and you consider the responsible actions of the public themselves, I believe you do gradually get back to the same level of confidence that we've had before."
Calhoun told the "TODAY" show he does not share the same view on the future of airlines as does billionaire investor Warren Buffet, who recently sold his entire $4 billion stake in U.S. airlines. Buffett said at the time he did not think people would fly as many passenger miles as they did last year.
“The world has changed for the 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 because of the extended period.”
"I don't happen to share the view," Calhoun told Guthrie. "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 that we had just in 2019, and then probably another two before we begin to return to the growth rates that we used to have. And I'm hopeful that somewhere between here and there, there's a vaccine, and that the moment of high anxiety begins to really subside. But I still believe in the future of the industry."
Guthrie also questioned Calhoun about the future of Boeing itself. The company's troubled 737 Max jet fleet remains grounded worldwide, after two crashes led to hundreds of fatalities.
"In remembrance of the two accidents, which were as real as can be, our heartfelt sorrows to everybody who was touched by those accidents," Calhoun said.
"We made a bad assumption, with respect to the design envelope for that airplane, at that moment in time, under that condition. Our assumption about how a pilot would react in a very tense, difficult moment was wrong. Simple as that. But I do believe that has been fixed. I also believe in the culture at Boeing. I believe — actually, all of our employees believe — deeply in safety. And have we taken a magnifying glass to everything we do, everything, so that we don't ever allow for something like that to happen in the future."
"I am confident in the Max," Calhoun said. "The certification work, the FAA's work, has been as thorough as anything I've ever seen. We've worked every scenario we can possibly work into the testing programs. And it does exceedingly well."
Calhoun also spoke proudly of how "magical" it was for Boeing to be helping out during the pandemic, delivering front-line emergency supplies.
"The pilots who fly these airplanes around the world, to deliver these supplies, it's our front line helping the health care front line," Calhoun said. "It's pretty magical when it happens, and it is wildly motivating for me, of course, but mostly for our people. And they need that kind of motivation."
Ecce Homo! Loquitur...
Friend who is owed money by Thai Airways just received an email reputedly from the Thai High Court stating they have filed for bankruptcy.
Nothing on the news, anyone else received the email or can confirm, or is this part of the restructuring to wipe its debts with creditors?
I know the Thai government said they would save them and allow them to restructure in mid-May, with the hearings due to start in August, and has started applying to the courts around the world to protect their assets from seizure.
https://uk.reuters.com/article/thai-...-idUKL4N2DM2AE
https://thethaiger.com/hot-news/tran...s-from-seizure
Nothing on the news, anyone else received the email or can confirm, or is this part of the restructuring to wipe its debts with creditors?
I know the Thai government said they would save them and allow them to restructure in mid-May, with the hearings due to start in August, and has started applying to the courts around the world to protect their assets from seizure.
https://uk.reuters.com/article/thai-...-idUKL4N2DM2AE
https://thethaiger.com/hot-news/tran...s-from-seizure
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For sure. Thai Airways is a basket case. But we've all known that for years. Whether they'll survive this crisis in any way, shape, or form is anyone's guess. Probably not for the best if they do, just for national pride's sake maybe..
N4790P
Friend who is owed money by Thai Airways just received an email reputedly from the Thai High Court stating they have filed for bankruptcy.
Nothing on the news, anyone else received the email or can confirm, or is this part of the restructuring to wipe its debts with creditors?
I know the Thai government said they would save them and allow them to restructure in mid-May, with the hearings due to start in August, and has started applying to the courts around the world to protect their assets from seizure.
https://uk.reuters.com/article/thai-...-idUKL4N2DM2AE
https://thethaiger.com/hot-news/tran...s-from-seizure
Nothing on the news, anyone else received the email or can confirm, or is this part of the restructuring to wipe its debts with creditors?
I know the Thai government said they would save them and allow them to restructure in mid-May, with the hearings due to start in August, and has started applying to the courts around the world to protect their assets from seizure.
https://uk.reuters.com/article/thai-...-idUKL4N2DM2AE
https://thethaiger.com/hot-news/tran...s-from-seizure
What is unbelievable is today TG announced all staff would be safe for the next year whilst they 'rehabilitate' the airline.
Seems they are still content to bleed cash whilst holding onto everyone's money.
No attempt to cut costs at all and just on going delays to any form of long overdue change.
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I started this thread exactly 6 months ago, so time to reflect on it :
Most of us are still there , not everyone is at work , but not many of us have been fired or furloughed yet . Only very few , mostly small ,airlines have collapsed as a result of the crisis, mainly due to vast state aid programs . Boeing and Airbus are still there and still manufacturing aircraft , albeit at a reduced rate..
Now where are we 6 months later? : Traffic worldwide is at 45% of 2019 levels, international and long haul is down 70--80% . Load factors are in the 45-50% and States travel restrictions are growing . Today everybody seem to agree that the crisis will last until 2024 at best.
The forecast is not very good for what is likely to happen in the meantime : Existing airlines, especially the legacy ones will become smaller , some even much smaller , a few may collapse, and many airports will have to cease operations . This winter will be hard for everyone . So the question is rather now : who will survive the next 6 months ?
Most of us are still there , not everyone is at work , but not many of us have been fired or furloughed yet . Only very few , mostly small ,airlines have collapsed as a result of the crisis, mainly due to vast state aid programs . Boeing and Airbus are still there and still manufacturing aircraft , albeit at a reduced rate..
Now where are we 6 months later? : Traffic worldwide is at 45% of 2019 levels, international and long haul is down 70--80% . Load factors are in the 45-50% and States travel restrictions are growing . Today everybody seem to agree that the crisis will last until 2024 at best.
The forecast is not very good for what is likely to happen in the meantime : Existing airlines, especially the legacy ones will become smaller , some even much smaller , a few may collapse, and many airports will have to cease operations . This winter will be hard for everyone . So the question is rather now : who will survive the next 6 months ?
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I think its more like - next 24+ months will be hard for everyone - I just cant see the liquidity being available to prop up airlines for an unknown traveller mindset - coupled with business world almost universally accepting that zoom/teams is an acceptable way forward for most organisations for most tasks, there will however always be exceptions, on the plus side holidays and escaping entrapment however is something that will always survive...
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Looks like 6 months is nothing on the grant scheme of things. More interesting who will still be here in 60 months. Even when recovery of previous traffic levels occurs, that still doesn't equal an all-clear. There will inevitably be someone who will succumb to their elevated ambitions to make use of the situation, eventually releasing all their ground to those who adopt a somewhat more conservative, but also more sustainable approach short-term. Think Small Planet back in the day. Great overall market, sudden availability of aircraft from Air Berlin, they tried to make use of the opportunity and choked on it within less than a year.
Airline liquidity isn't measured at a granularity of 60 months, it is 6-12 months. Many airlines will hit cash-flow issues this winter if there is no ski-season. May will not survive into 2021 without government aid.
