Warren Buffett is a successful capitalist of America, benefactor, and a business magnate CEO of “Berkshire Hathaway”. He is also well-known as “Oracle of Omaha”
A fortunate investor of the world with extra ordinary mind. In December, 2019 net worth of Warren Buffet is approximately US 88.9 billion dollars.
Mother company Berkshire Hathaway is occupying more than 60 companies which includes restaurant chains, insurer Geico and battery makers Duracell.
Berkshire Hathaway Sell All Its Shares of Airlines?
Warren Buffett has invested in major airlines of United States a few years ago but this investment didn’t suits his company. Due to COVID-19 Pandemic conditions all airlines grounded their planes. World has been changed during last few months and now business trends and investment strategies will also going to change. Due to pandemic condition all investors are taking crucial decisions to save their capital investments.
In annual meeting of Berkshire Hathaway, Buffett announced that company has sold out all their shares in the four main airlines of U.S. This exiting of Buffett creates a situation of uncertainty for all other airlines investors.
Sold shares details are:
- Southwest Airlines- 53, 649, 213 Shares
- Delta Airlines- 71, 886, 963 Shares
- United Airlines- 21, 938, 642 Shares
- American Airlines- 42, 500, 000 Shares
As per details shared in the annual meeting by Buffett, Berkshire Hathaway has made a total investment of 8 billion dollars a few years ago in the four major airlines of United States of America. During this pandemic condition when all airline are forced by the Government to ground their planes, in the month of April-2020 Berkshire Hathaway sold out all their shares and recovered an amount of 6.1 billion dollars.
Does Warren Buffet Admits his Mistake?
American air travel sector is fully collapsed due to strong hit of COVID-19 outbreak. Airlines are grounding planes cutting hundreds of thousands of flights internationally or nationwide.
He said we will never trust a company which will going to collapse in future.
The Oracle of Omaha said, his decision of investing in airline companies is wrong. He said before this pandemic condition, he was thinking of making more investments in this sector but he was wrong.
According to his words, he was getting handsome profit when he invested in airlines stocks. But he said, his decision was proved wrong when all airlines shutdown during this pandemic and it was not the fault of any of the four CEOs of airline companies. He didn’t declared CEOs are guilty for this.
He said, “There is no joy or amusement to be a CEO of an airline company”
How is the aviation world after covid 19?
What Warren Buffett Thinks About His Decision of Selling Airline Shares?
Warren Buffett is quite satisfied about his decision of selling shares of airlines. Although it was a hard decision but the pandemic condition in the World has made it easy to take this step of selling airline assets. He said the amount he got after selling all his shares in airlines is far away from the amount he had invested.
According to him, he is not sure that when this pandemic condition ends and what will be the percentage of people travelling through planes. He think it will take years to normalize this business as before this pandemic condition.
He also highlighted that every airline is now borrowing estimated amount of 10 billion dollars to 12 billion dollars which they have to pay back in future. According to Buffets mindset, he thinks these borrowings will not allow the airlines to provide the same quality of services as they are providing before.
According to him, after this pandemic condition if airlines succeed in making 70% to 80% recoveries then they still have too many planes. They have to sell their stock to raise their capital.
He concluded annual meeting with these words:
“The world has changed for airlines and we wish them best of luck for future endeavors”
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