Tuesday was a rough day for U.S. airline stocks, with major airlines sinking 3-5%. One culprit? The loose lips of Boeing CEO Dave Calhoun.
Yesterday, Calhoun was on NBC’s TODAY show and predicted that a major airline would go out of business due to COVID-19.
GUTHRIE: Do you think there might be a major U.S. carrier that just has to go out of business?
CALHOUN: Yes, most likely. You know, something will happen when September comes around.
FT and MarketWatch both noticed that the interview sent airline stocks spiraling downward.
A Boeing spokesperson told FT that Calhoun was “speaking to the general uncertainty in the sector” but “not about any one particular airline” when he predicted that one airline would go out of business.
> Read More: Boeing CEO Predicts Major U.S. Airline Will Go Out Of Business
The interview also sent Boeing stock in a negative direction, even though Calhoun expressed unqualified confidence in Boeing’s troubled 737 MAX project. See what I did there with one word? Words matter greatly. The language of Calhoun was not constructive, especially when it appears he did not even mean it.
CONCLUSION
Perhaps Calhoun just stated the obvious: the recovery will be slow and may indeed take more than three years. But to warn that a “major” U.S. airline will “likely” go out of business when you meant something else reminds me of the WWII-era posts in the United Kingdom:
Why? Because Calhoun may actually be in a position to know something more than the general public and his bold prediction might hasten what otherwise may not have occurred.
How the F**K did this dimwit become CEO of one of the biggest companies in the world? It redefines cretinous….
How the F**K did another dimwit become POTUS? It redefines everything we ever knew…
How the F**K did dimwit Biden become the nominee or China and Mexico loving Nancy continue to be speaker of the House?
I highly doubt a major US airline (at least the largest ones) will go out of business. Between Chapter 11, government bailouts, and lessors/banks simply having nowhere else to place those planes in the next 12-24 months, I just can’t see it.
Chapter 11? yes. Stop flying altogether. No.
And I would agree with this. There’s a huge difference between using Chapter 11 to shed obligations and going the Chapter 7 (“out of business”) route.
Boeing isn’t winning any friends with thoughtless statements like that. What possible good would come from saying something like that?
Boeing CEO… now that’s a reliable source.. LOL… smh.
Seems like deflection given Boeing’s own recent struggles. Funny that this guy points fingers at the airlines – let’s ask him now the MAX is doing.
Can you believe this guy a CEO who lives in a glass house throwing stones at his own customers. I hope Boeing has to eat all those miserable scary 737MAX what a piece of junk. 14 months grounded and counting.
He was asked his opinion and he gave it. He does need to qualify what he defines as major U.S. airline because I doubt the big 3 are going to in the near future especially if they can negotiate wages.
I really wish Boeing management decided to cancel the Max. At 400 a share they weren’t able to but at 130 a share I think they have that option. In addition to the military contracts, the 787 and the 777X can provide good profitability. It seems a lot of airlines are making the 787 a big part of their fleet by retiring the 757 and 767. If they can get more orders from airlines that want reduced costs with common type that would be good. Boeing can sell the public on two clean sheet designs to replace the 737, 757 and 767 (NMA). So many planes will be parked that I don’t see huge demand for a number of years for new aircraft. I am a fan of Boeing and Airbus made similar missteps with the A320neo having the same center of gravity problems but the extending the 737 was the wrong approach.