Airline stocks fell sharply on Tuesday after Boeing Co. chief executive David Calhoun offered bleak prospects for the industry, including predicting that a "major" bankruptcy was likely within months to come up.
"I don't want to be too predictive on this subject," said Calhoun. "Yes, there is a chance something will happen when September arrives."
He said he thought air traffic would not return to 25% in September and that "maybe" they would only reach 50% by the end of the year , with a return to pandemic levels before COVID-19. which is probably not three. at five
The Global Jets exchange-traded fund. USA
JETS,
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It fell 2.5% in the midday trade, reversing a gain of up to 1.4% at the start of the session.
Among the most active components of Jets ETFs are the stocks of American Airlines Group Inc.
AAL
3.5%, Delta Air Lines Holdings Inc.
DAL
decreased 2.9% and United Airlines Holdings Inc.
UAL
3.7% dived.
Among the stocks of other major carriers, as defined by those who are components of the average Dow Jones transportation
DJT
Southwest Airlines Co.
LUV
dropped 1.7%, JetBlue Airways Corp.
JBLU
lost 3.2% and Alaska Air Group Inc.
ALK
gave 2.9%.
Elsewhere, the actions of Spirit Airlines Inc.
SAVE,
Hawaiian Holdings Inc., parent company of Hawaiian Airlines, fell 2.8%
SAY AH,
decreased 2.4% and the shares of Mesa Air Group Inc.
LOW HILL,
down 6.4%.
Guthrie also asked Boeing.
LICENSED IN LETTERS,
Calhoun said what he thought about Warren Buffett's recent negative appeal to the airline industry in which the billionaire investor said he had sold his big holdings in the United States , Delta, States and Southwest.
Do not get lost: Airline inventories plummet after Warren Buffett left the industry, negative outlook for Air Canada.
Calhoun said that while he doesn't share Buffett's long-term vision, he does share the short-term vision, but his short term doesn't just mean a few months.
"I think it's three years before we get back to the level of traffic we had in 2019, and then probably another two years before we start to regain the growth rates we had before," said Calhoun.
His view of the moment of complete healing was a little longer than many expected.
Cowen analyst Helane Becker said that among respondents to the corporate travel survey, 52% expect a U-shaped recovery for the company. industry, and 37% expect a return to 2019 levels. In 2 to 3 years, 25% expect a full recovery in 3 to 4 years and only 12% expect recovery in more than 4 years.
Southwest CEO Gary Kelly said earlier this month that he believed the fund had been hit in April, a sentiment echoed last week by Joanne Geraghty, director of operations for JetBlue.
Read more: Airline stocks lose losing streak as JetBlue believes demand has already bottomed out.
Boeing stocks took a hit this year as the aircraft manufacturer suffered a double dose of problems due to the prolonged downtime of its 737 MAX after crashes and reduced demand for aircraft planes that suffered. the COVID-19 pandemic. The company recently announced plans to resume production of the 737 MAX aircraft this year at a low rate and to gradually increase the rate of production. Learn more about Boeing's first quarter results.
Jets ETF is down 59% to date. In comparison, Boeing shares fell 61%, Dow transportation is down 25% and the Dow Jones Industrial Average
DJIA
reported 15%.