BILLIONAIRE investor Warren Buffett has dumped all his shares in the four largest US airlines because the ‘world has changed’ due to the coronavirus.
In what is seen as a grim sign for the future of the Covid-19 crisis-hammered airline industry, Buffet’s company Berkshire Hathaway has offloaded stock in United, American, Delta and Southwest Airlines.
Buffet told company shareholders in a virtual annual meeting “I was wrong about that business.”
He added, “We will not fund a company that… where we think that it is going to chew up money in the future.”
He pointed out the coronavirus pandemic has effectively shut off air travel in the US and that demand had dried up, commenting, “The airline business, and I may be wrong, and I hope I’m wrong, changed in a major way.
“We like those airlines but the world has changed… and I don’t know how it’s changed,” he said.
Berkshire Hathaway started investing in the airline sector in 2016. According to its annual report and company filings it had an 11 per cent stake in Delta Air Lines, 10 per cent in American Airlines, 10 per cent of Southwest Airlines, and 9 per cent of United Airlines.
Since the start of the Covid-19 crisis airline passenger volume in the US has fallen by some 90 per cent on the same period last year, industry groups report. More than 3,000 aircraft have been grounded, representing around half the active fleet.
On the same day Buffett made his announcement on the airline shares, Berkshire Hathaway reported a record $50 billion net first quarter loss.