Berkshire Hathaway, the conglomerate run by billionaire investor Warren Buffett—the so-called "Oracle of Omaha"—has sold its entire position in the U.S. airline industry.
Buffett made the announcement at his annual shareholder meeting on Saturday, held virtually for the first time this year due to the coronavirus pandemic.
The company’s stake in airlines, including United (UAL) - Get United Airlines Holdings Inc. Report, American (AAL) - Get American Airlines Group Inc. Report, Delta (DAL) - Get Delta Air Lines Inc. Report, and Southwest (LUV) - Get Southwest Airlines Company Report, was worth about $4 billion.
“It turned out I was wrong about that business because of something that was not in any way the fault of four excellent CEOs. Believe me. No joy of being a CEO of an airline,” Buffett said.
In premarket trading Monday, U.S. airline shares were down sharply. Airline executives have indicated that it will take years to recover from the economic downfall from the coronavirus. U.S. travel is down 95% so far this year.
Buffett said that airline business has "changed in a very major way" that will leave carriers more indebted and with fewer commercial passengers and "too many planes."
In a time when many are increasingly questioning the future of the airline industry, Buffett wasn't any more optimistic.
"It turned out I was wrong about that business because of something that was not in any way the fault of four excellent CEOs.We made that decision (to exit) in terms of the airline business," he later said. "We took money out of the business basically even at a substantial loss, and we will not fund a company that where we think that it’s going to chew up money in the future," Buffet said.