Boeing CEO predicts one major US airline won't survive. Which one?
May 12, 2020, 7:14 am
#1
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Boeing CEO predicts one major US airline won't survive. Which one?
Boeing CEO predicts coronavirus pandemic will claim a major U.S. airline. He didn't name names -- 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. Dawn Gilbertson/USA Today
Do you agree? If so, which airline will fall?
Do you agree? If so, which airline will fall?
May 12, 2020, 8:03 am
#3
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I actually think Southwest is at most risk. They're incredibly bureaucratic and have been slow to do anything. They haven't taken out nearly enough capacity compared to the other majors and they are running single digit load factors some days. They are bleeding cash and aren't moving fast enough to establish lines of credit.
May 12, 2020, 8:06 am
#4
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Is Frontier major? They got some bad PR over the attempt to charge that $89 social distancing fee (for an empty middle seat) and they've been in shaky financial condition.
May 12, 2020, 8:27 am
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May 12, 2020, 9:14 am
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The underlying problem could cause any of the major carriers to fail. The phrase "too big to fail" will probably save AA, UA, DL, WN, and AS. I'm guessing chapter 11 for one or more and possibly mergers that otherwise might not be allowed like AA & AS.
May 12, 2020, 9:19 am
#8
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I wonder how Spirit, Allegiant and Frontier will fare.
May 12, 2020, 1:50 pm
#9
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As this thread is not specific to AA, we will move it to TravelBuzz for more general discussion of the airline industry. Thanks! 
/JY1024, AAdvantage and TravelBuzz moderator
/JY1024, AAdvantage and TravelBuzz moderator
May 12, 2020, 2:04 pm
#10
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I agree they appear to big to fail but I could see carriers like Alaska, Jet Blue, or Southwest either being absorbed into the big 3 or just going belly up.
May 12, 2020, 2:31 pm
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Checking Yahoo Finance quickly, at the end of last year Southwest was valued at almost $30 billion, AA half that of SW, then United is at $22 billion and Delta was flirting with almost $40 billion valuation.
Given those numbers I assume he meant AA, but I don't agree; I think Delta, AA, United, and SW are too big to fail - or perhaps more accurately "too well known to be allowed to fail, otherwise we get market panic" but IMO we'll see some of the smaller airlines go bankrupt.
Given those numbers I assume he meant AA, but I don't agree; I think Delta, AA, United, and SW are too big to fail - or perhaps more accurately "too well known to be allowed to fail, otherwise we get market panic" but IMO we'll see some of the smaller airlines go bankrupt.
May 12, 2020, 4:08 pm
#13
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I could see one or more of the major 6 US airlines going into Chapter 11 but ultimately it would be re-organization not a liquidation. Now some of the smaller airlines is another question. The big unanswered questions are when and to what extent will business travel rebound and in the face of god knows what unemployment how will the ULCCs fare. Add into the equation the health concerns start continue in light of MSM panic porn. I think there will also be another round of consolidation.
May 12, 2020, 8:04 pm
#14
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Boeing CEO predicts one major US airline won't survive. Which one?
I would think that at leas there would be a merger permitted
Probably ought to consider being absorbed by UA they have all the experience on how to screw things up