WASHINGTON (Xinhua) – Billionaire investor Warren Buffett, who serves as Berkshire Hathaway chairman, said on Saturday that his conglomerate has sold all its airline stocks, sending an alarming signal to United States (US) airline industry devastated by the
“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 USD4 billion in December, but stocks are down by 69.7 per cent, 62.9 per cent, 45.8 per cent, and 58.7 per cent this year according to a report from CNBC.
As of December, Berkshire owned 10 per cent stake in American Airlines shares, 9.2 per cent stake in Delta Airlines shares, 10.1 per cent stake in Southwest Airlines shares and 7.6 per cent 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 totalled over USD20 billion.
In light of the plummeting demand for air travel, the US government recently offered USD25 billion 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 programme.
Noting that US airlines have seen passenger volumes decimated in every region, industry group Airlines for America said in a report released on Saturday that air travel fell 96 per cent 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 January 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 US has registered more than 1.1 million coronavirus cases and over 66,000 deaths as of Saturday night.