Airline stocks took a nosedive Monday after investing icon Warren Buffett said he dumped his company’s stake in the four major US carriers. Shares in American Airlines, Delta Air Lines and United Airlines each plunged at least 14 percent Monday after the billionaire Berkshire Hathaway boss said his conglomerate has completely abandoned its investments in …
Airline stocks took a nosedive Monday after investing icon Warren Buffett said he dumped his company’s stake in the four major US carriers.
Shares in American Airlines, Delta Air Lines and United Airlines each plunged at least 14 percent Monday after the billionaire Berkshire Hathaway boss said his conglomerate has completely abandoned its investments in them. Berkshire also ditched its stake in Southwest, whose shares dropped as much as 9.3 percent.
Buffett suggested that the pandemic poses a long-term risk for airlines and questioned whether passengers will do as much flying once the crisis is over. Berkshire Hathaway previously owned 11 percent of Delta, 10 percent of American and Southwest, and 9 percent of United.
“The world has changed for the airlines,” Buffett, 89, said Saturday at the company’s annual meeting, according to CNBC. “I don’t know if Americans have now changed their habits or will change their habits because of the extended period.”
American shares were off 10 percent at $9.57 as of 12:32 p.m., while United shares were down 9.4 percent at $24.10. Delta’s stock price was recently off 9.2 percent at $21.90 while Southwest’s had slipped 7.8 percent to $26.95.
Buffett’s revelation was the latest sign of how the coronavirus crisis has kneecapped the global travel industry, which is reportedly trying to lay the groundwork for a recovery as some countries start to reopen their economies.
The pandemic forced airlines to ground roughly two thirds of their planes as demand for flights dried up and countries imposed travel restrictions. Major carriers have also asked employees to take unpaid leave as they grapple with the financial impact of the crisis.
Airlines have taken steps to prevent the spread of the virus as parts of Europe and the US begin to ease lockdowns aimed at curbing the pandemic, such as forcing passengers to wear face masks or blocking middle seats.
But airlines still need to fill at least 70 percent of the seats on most flights to break even, Alexandre de Juniac of the International Air Transport Association told the Associated Press. Carriers could hike prices 50 percent if they have to remove or block many seats, he said.
With Post wires