"We did not take out anything like $7 or $8 billion and that was my mistake," Warren Buffett said at the company's annual meeting, which was livestreamed. "I am the one who made the decision."
Warren Buffett, CEO and chairman of Berkshire Hathaway, said the company had sold all its shares in airlines because of the border closures caused by the outbreak of the coronavirus.
“The world has changed,” Warren Buffett said at the company’s annual meeting on Saturday (US time).
“We made that decision in terms of the airline business. We took money out of the business basically even at a substantial loss,” Buffett said.
“We will not fund a company that – where we think that it is going to chew up money in the future.”
Berkshire Hathaway held an 11% stake in Delta Air Lines, 10% of American Airlines, 10% of Southwest Airlines and 9% of United Airlines at the end of 2019, according to its annual report and company filings.
Buffett said Berkshire Hathaway had invested around US$7 billion or US$8 billion in total on stakes in the four airlines.
“We did not take out anything like $7 or $8 billion and that was my mistake,” Buffett said at the company’s annual meeting, which was livestreamed.
Berkshire Hathaway was one of the largest individual holders in the four airlines and in 2016 disclosed it had begun investing in the four US carriers after avoiding the sector for years.
“It is a blow to have essentially your demand dry up …. It is basically that we shut off air travel in this country,” Buffett added.
US airlines have had to cut hundreds of thousands of flights and park thousands of planes as travel demand has fallen by about 95%. However, the latest US Transportation Security Administration figures revealed that it screened 154,695 people last week, the highest figure since 30 March.
American Airlines, who are offering face masks to its customers, have made the wearing of face masks mandatory for passengers from 11 May. Jet Blue and Delta Air Lines have made it mandatory from today (4 May). Frontier Airlines will follow suit on 8 May. In addition, Delta is informing passengers that the masks should be worn at check-in counters, Delta Sky Clubs, boarding gate areas and jet bridges.
Delta Air Lines said in a statement it was aware of the sale and has “tremendous respect for Mr Buffett and the Berkshire team.”
Delta Air Lines added it remains ““confident that the strengths that are core to Delta’s business – our people, our brand, our network and our operational reliability – will endure and position Delta to succeed”.
Berkshire Hathaway said it lost US$49.7 billion during the first quarter of 2020. It made a profit of US$21.66 billion at the same period last year.
Berkshire Hathaway, which owns more than 90 companies and has major investments in such companies as Apple, American Express, Coca-Cola and Bank of America, has more than US$137 billion in cash.