Olde Hornet
Well-Known Member
Warren Buffett gave airlines another go. Coronavirus was a problem he couldn't stomach
Warren Buffett has again ditched the airline sector as coronavirus threatens to be a challenge too big for him to stomach.
A 95% plunge in passengers. Billions in losses. A rush for new debt. A recovery that executives expect to take years. Coronavirus is roiling the airline industry and the Oracle of Omaha has seen enough.
Warren Buffett told investors Saturday that Berkshire Hathaway has sold its entire stakes in the four largest U.S. airlines — American, Delta, Southwest, United — as the pandemic upends another bet on the sector that the famed investor had shunned for years before a surprise return in 2016.
An embittered Buffett said in 2007 investor letter: “If a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down” and referred to a soured bet on US Air in the 1990s. “The airline industry’s demand for capital ever since that first flight has been insatiable. Investors have poured money into a bottomless pit, attracted by growth when they should have been repelled by it,” he continued.
