Though he did not name any specific airlines in an interview, he predicted that something would happen by September, which is the month when the U.S. government’s payroll aid to the airline industry is set to expire.
When that aid expires, it could result in widespread layoffs among various airlines. Calhoun said he doesn’t expect passenger traffic to reach even a quarter of its pre-pandemic levels by September, creating the need for airlines to make adjustments as they weather the impact of the coronavirus pandemic.
“Traffic levels will not be back to 100 per cent. They won’t even be back to 25 per cent. Maybe by the end of the year, we approach 50 per cent. So, there will definitely be adjustments that have to be made on the part of the airlines,” he said.
Calhoun said the situation was “grave” but the airline and aviation would bounce back. “Apocalyptic does actually accurately describe the moment but I don’t think it describes the recovery and I don’t think it describes the medium or long term for the airline or aviation industry. We believe we will return to a growth rate similar to the past but it might take us three to five years to get there.”
Calhoun said his view of the future of the industry differed from that of billionaire Warren Buffet, who sold off his entire $4 billion stakes in major U.S. airlines earlier this month. Buffet, at the time, said the “world has changed” for the airline industry.
“I don’t happen to share the view. I share the near-term turmoil. Near-term for me doesn’t mean a few months,” Calhoun said.