Warren Buffett's Berkshire Hathaway sells all airline stocks amid pandemic
Billionaire investor Warren Buffett, who serves as Berkshire Hathaway chairman, said Saturday that his conglomerate has sold all its airline stocks, sending an alarming signal to US airline industry devastated by the COVID-19 outbreak.
"The world has changed for the airlines," said Buffett in Omaha, Nebraska, at Berkshire Hathaway's annual shareholder meeting, which was held virtually this year.
"And I don't know how it's changed and I hope it corrects itself in a reasonably prompt way," he said. "It turned out I was wrong about that business."
The Berkshire Hathaway previously held shares of United Airlines, American Airlines, Southwest Airlines and Delta Airlines, worth over US$4 billion in December, but stocks are down by 69.7 percent, 62.9 percent, 45.8 percent, and 58.7 percent this year, respectively, according to a report from CNBC.
As of December, Berkshire owned 10 percent stake in American Airlines shares, 9.2 percent stake in Delta Airlines shares, 10.1 percent stake in Southwest Airlines shares and 7.6 percent stake in United Airlines shares, the report showed.
Also on Saturday, Berkshire reported a net loss of nearly 50 billion dollars for the first quarter as the COVID-19 outbreak heavily hit its stock investments. A year earlier, net earnings totaled over 20 billion dollars.
In light of the plummeting demand for air travel, the US government recently offered 25 billion dollars in direct aid to passenger airlines so that they could continue paying salaries and benefits to their employees in the next few months.
Ten major airlines, including American Airlines, Delta Air Lines, United Airlines, and Southwest Airlines have told the US Treasury Department that they intend to accept assistance through the program.
Noting that US airlines have seen passenger volumes decimated in every region, industry group Airlines for America said in a report released Saturday that air travel fell 96 percent in the most recent week.
In the first two months of this year, the domestic US flights averaged about 85 to 100 passengers, while currently, they are carrying about 15 to 20 passengers on average, the report showed.
Worldwide, there were 111,000 commercial flights per day in the week ending Jan. 7, but the figure plunged to 29,000 in the week ending April 30, according to the industry group.
The latest figures from the Johns Hopkins University showed that the United States has registered more than 1.1 million coronavirus cases and over 66,000 deaths as of Saturday night.