Ex-airline CEO Bethune: Boeing woes will impact airline industry revenues

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Airlines that operate Boeing 737 Max airplanes will feel the pinch from the ongoing problems plaguing the manufacturer, former Continental Airlines CEO Gordon Bethune told CNBC on Thursday.

Boeing saw its stock tumble nearly 3% after it further delayed when the top-selling planes — operated by major lines including Southwest Airlines and United Airlines — could return to the sky.

“It’s a disappointment, obviously” for the airlines, he said on “Closing Bell.” “They’ve got route planning and new cities in their schedule, and without these airplanes in the supply chain, they won’t be able to do all the things they want to do. So there will be a revenue impact to every airline that operates a 737.”

Bethune led a turnaround of Continental Airlines from 1994 until he retired in 2004.

The 737 Max has been grounded around the world since March because of safety concerns surrounding two fatal crashes involving the plane earlier this year and in late 2018. United and American Airlines reportedly canceled trips scheduled on the plane through September, while Southwest pushed back reintroduction of the Max aircraft through October.

The moves follow the Federal Aviation Administration’s notice on Wednesday to Boeing that it would need to address recently discovered concerns before the grounding order in the United States would be lifted.

Still, Bethune, who prior to his role at Continental served a stint at Boeing overseeing its 737 and 757 airplanes, said he is confident the company’s woes will not affect consumer desire to fly Boeing aircraft in the long run.

“Maybe initially [passengers won’t want to fly 737s], but memory is really short and [Boeing has] a really deep history of safety behind them,” Bethune said. “They’re going to get it fixed. In the old days they’d say, ‘If it ain’t Boeing, I ain’t going,’ and people really rely on that name. So I think it’ll come back.”

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