US, WASHINGTON (ORDO NEWS) — US airline stocks plummeted again after Warren Buffett said the Berkshire Hathaway fund sold all of its stakes in the four largest US carriers, as coronavirus hurt travel demand, CNBC writes.
Berkshire was one of the four largest airline investors – American, Delta, Southwest and United. Buffett announced earlier that his fund would get rid of stocks. Berkshire announced a net loss of about $ 50 billion in the first three months of the year.
Shares of American and United fell by more than 12% before the start of trading. Delta Airlines fell by more than 11%, while Southwest fell by about 10%.
Buffett has long avoided investing in airlines. In a letter to shareholders from 2007, he said that investors in these companies “poured money into a bottomless hole attracted by growth when they should have acted completely differently.”
But he returned in 2016 with an investment in four carriers, as the industry enjoyed stable profits and the benefits of high travel demand and lower fuel costs than in previous years.
The four airlines previously published their first quarterly losses in recent years and warned of a slow recovery in demand from the level observed before the outbreak of coronavirus. Delta CEO said it could take two to three years.
“I mean, believe me, there is no joy in being the CEO of an airline,” Buffett said. “But the companies we bought were well-managed. They did a lot right.”
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