- Warren Buffett is too negative about the prospects for air travel after the coronavirus outbreak, Raytheon Technologies CEO Gregory Hayes said at a conference on Tuesday.
- “Unlike Mr. Buffett, I actually do believe that the airline industry is going to come back,” Hayes said.
- Hayes’ comments echo those of Southwest Airlines CEO Gary Kelly, who said last week that Buffett was too “pessimistic” about travel and tourism rebounding.
- In contrast, Boeing CEO David Calhoun warned a major US airline will “most likely” fail this year as passenger numbers won’t rebound quickly.
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Warren Buffett is too bearish about air travel following the coronavirus pandemic, Raytheon Technologies CEO Gregory Hayes said at a Bank of America conference on Tuesday.
“Unlike Mr. Buffett, I actually do believe that the airline industry is going to come back,” the aerospace and defence giant’s chief replied to an analyst’s question about Raytheon’s short-term challenges, according to a transcript on Sentieo, a financial-research site.
Buffett’s Berkshire Hathaway conglomerate dumped its stakes in the “big four” US airlines in April. The billionaire investor feared passenger numbers would remain depressed for the next few years, leaving the carriers with “too many planes” and forcing them to slash prices and suffer heavy losses.
Travel restrictions and coronavirus fears have driven US passenger traffic down more than 90% in recent weeks, resulting in more than half of the airlines’ 6,200 passenger planes sitting idle, according to Airlines for America.
Hayes’ comments echo those of Southwest CEO Gary Kelly, who described Buffett’s view as “pessimistic” and proclaimed he was “far more optimistic” that travel and tourism would recover in a CNN interview last week.
However, Kelly added that Southwest burned nearly $US1 billion in cash in April, and warned it would have to “dramatically downsize” if conditions don’t improve.
The two bosses seem more bullish than Boeing CEO David Calhoun, who warned it was “most likely” that a major airline would fail this year on NBC’s “Today” program this week.
Calhoun also suggested passenger traffic might only recover to half its pre-pandemic level by the end of this year.