The American investment community was shocked to learn that Warren Buffett, one of the most notable traders in US history, had sold his shares with the four most noteworthy airlines in America. This was accomplished through his trading firm, Berkshire Hathaway. Data regarding the traded stocks followed after Warren Buffett held a shareholders meeting. He revealed that the world has changed because of COVID-19 and that Berkshire Hathaway was wrong to invest in the airline industry. These remarks followed after the trading firm announced a $50 Billion Q1 Net Loss. It’s the most significant drop in valuation for Buffett’s company in history.
The Berkshire Hathaway Group maintained stocks with American Airlines at 10%, Delta Air Liners at 11%, United Airlines at 9%, and Southwest Airlines at 10%. This substantial rate of holdings followed after Warren Buffett initially began the “Airline Investment Period” in 2016, believing global conditions couldn’t infect the aviation industry. The novel coronavirus showed Warren Buffett that nations will still implement travel restrictions, forcing drastic depletion in profit margins.
Warren Buffett held this meeting through a virtual program, which has remained unnamed for internal safety. He mentioned to shareholders that this decision was made to ensure Berkshire Hathaway doesn’t face increasing losses. He noted that they could not fund companies that’ll continuously need bailouts for the foreseeable future. Warren isn’t incorrect with the airline assessment, as the industry has collapsed during this pandemic and thousands of planes have been decommissioned for a prolonged period. Millions of jobs in the airline industry have been lost since international travel restrictions were imposed.
Thanks & No Thanks
Delta Airlines provided their insight through social media accounts like Twitter and Instagram, noting their significant respect for Warren Buffet and the Berkshire Hathaway Group. Delta is confident in their strength in future regrowth efforts, which they hope will return Warrant Buffett as a prospective investor. It should be mentioned that American Airlines and Southwest haven’t provided public remarks on Buffets decision. It’s suspected that their thinking of this announcement as another blow, not an opportunity to increase relationships with BHG.