Posted on 05/03/2020 4:22:56 PM PDT by Capt. Tom
A 95% plunge in passengers. Billions in losses. A rush for new debt. A recovery that executives expect to take years. Coronavirus is roiling the airline industry and the Oracle of Omaha has seen enough.
Warren Buffett told investors Saturday that Berkshire Hathaway has sold its entire stakes in the four largest U.S. airlines American, Delta, Southwest, United as the pandemic upends another bet on the sector that the famed investor had shunned for years before a surprise return in 2016.
And it turned out I was wrong about that business because of something that was not in any way the fault of 4 excellent CEOs, Buffett said Saturday in Berkshire Hathaways annual meeting, which was webcast because of the pandemic and travel restrictions. Berkshire reported a net loss of close to $50 billion in the first three months of the year.
An embittered Buffett said in 2007 investor letter: If a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down and referred to a soured bet on US Air in the 1990s.
(Excerpt) Read more at cnbc.com ...
People with money have been doing that and will continue to. The reason people won't fly as much in 2020 (which is more than 1/3 over) isn't lack of a vaccine (vaccine for COVID-19 is probably both a pipe dream and completely unnecessary) it is lack of an economic reason to go (for business travs) and lack of a recreational reason and/or financial resources to go have fun somewhere. OTOH, if the oil prices stay low for a while, it should be quite economical to fly.
Well stated!
There's a Dow Jones Newswires story, one paragraph, "Supply Chain Issues Expected When Theme Parks Reopen - Market Talk", dated May 1. Some of the pretty nice fat gains to the amusement park stocks went back on Thu and Fri, btw. Flat today.
Right this second, BRK.A is down 6585 a share (267270.21), oops, now down more than, nearly 6700; and BRK.B is down less than $5 (177.86).
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