Buffett: “I wish them well”

[+ Keith30309]

Holy kiss of death ! Buffett is always very low key in his statements and this struck me as like a lightning bolt hurdled down at the airlines.

 

 

The billionaire investor said Berkshire Hathaway Inc. completely exited its stakes in the four major U.S. airlines. The sales of shares of Delta Air Lines Inc., Southwest Airlines Co., American Airlines Group Inc. and United Airlines Holdings Inc. made up most of the company’s $6.5 billion in equity sales in April.

 

During his live-streamed annual meeting, Buffett said the business has fundamentally changed following the economic fallout from the coronavirus pandemic. He declined to blame the performance of the airline CEOs, adding that he doesn’t envy their jobs, especially in a period like this.

 

“The world changed for airlines and I wish them well,” Buffett said Saturday in a webcast. He clarified that he made the decision and that he lost money on his investments. “That was my mistake.”

 

“The airline business -- and I may be wrong and I hope I’m wrong -- but I think it’s changed in a very major way,” Buffett said. “The future is much less clear to me.”

[+ Pensant]

I have a flight to Seattle on the 28th on Alaska. I think it should be fine. Other than that, little air travel planned for the rest of 2020.

[+ FrankR]

Holy kiss of death ! Buffett is always very low key in his statements and this struck me as like a lightning bolt hurdled down at the airlines.

 

 

The billionaire investor said Berkshire Hathaway Inc. completely exited its stakes in the four major U.S. airlines. The sales of shares of Delta Air Lines Inc., Southwest Airlines Co., American Airlines Group Inc. and United Airlines Holdings Inc. made up most of the company’s $6.5 billion in equity sales in April.

 

During his live-streamed annual meeting, Buffett said the business has fundamentally changed following the economic fallout from the coronavirus pandemic. He declined to blame the performance of the airline CEOs, adding that he doesn’t envy their jobs, especially in a period like this.

 

“The world changed for airlines and I wish them well,” Buffett said Saturday in a webcast. He clarified that he made the decision and that he lost money on his investments. “That was my mistake.”

 

“The airline business -- and I may be wrong and I hope I’m wrong -- but I think it’s changed in a very major way,” Buffett said. “The future is much less clear to me.”

Well, he certainly voted with his wallet!

[Guest]

I flew last week wearing my N95 mask and gloves. The planes were 1/4 full. I was one of two full fare paying first class tickets on each flight, but the airline upgraded others so that, at 50% occupancy, first class was the most dense section on the plane. C’est la vie... 80% of people I saw on the planes and in the airport were NOT wearing any PPE at all. The only sensible thing I saw was that they boarded the plane from the back.

 

our psyche is forever shaken by this pandemic. I do not see the airlines coming back soon and the financial impact of them “bridging” to the new normal forever changes the trajectory of their valuations.

 

the only place I’d differ with Buffet is on whether they ever had any value to begin with. I can honestly say I’ve never owned stock in an airline since I could never get my head around their complex accounting to understand their real cash flow available to shareholders. High fixed costs, high leverage, union issues...I’m not smart enough or clairvoyant enough to understand the value proposition for shareholders.