Warren Buffett’s Berkshire Hathaway took a $5 billion hit on its airline stocks last quarter

warren buffettGetty Images / Bill Pugliano

  • Warren Buffett’s Berkshire Hathaway took a $5 billion hit from airline stocks in the first quarter as the novel coronavirus hammered demand for flights.
  • The billionaire investor’s company owns more than 8% of all four major US airlines.
  • Shares in American, Delta, Southwest, and United plunged by an average of 52% last quarter.
  • However, Buffett’s long-term view could lead him to double down on the struggling airlines.
  • Visit Business Insider’s homepage for more stories.

Warren Buffett’s Berkshire Hathaway probably saw $5 billion wiped off the value of its airline holdings in the first quarter as the novel coronavirus deterred people from flying and forced authorities to halt flights.

The famed investor’s conglomerate owns between 8% and 11% of the big four US airlines — American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines — assuming its holdings haven’t changed since December 31, the date of its last portfolio disclosure.

The quartet’s market capitalizations fell by an average of 52% in the first three months of 2020. United stock plunged 65%, while American and Delta shares more than halved in value. Southwest, down 35%, was the relative outperformer.

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The declines slashed the value of Berkshire’s airline holdings by $5 billion. The conglomerate lost $2 billion on Delta and more than $1 billion on both United and American.

Buffett famously invests for the long term, so he’s unlikely to be worried by the dramatic declines. In fact, he bought another $45 million worth of Delta stock in early March, after the airline’s shares plunged 20% in the space of a week.

The value investor may be looking to spend more of Berkshire’s $128 billion cash pile on airlines. He is eyeing travel companies and other businesses hit hard by the pandemic, The Wall Street Journal reported this week.

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