Did Warren Buffett and Berkshire Just Bail on Airlines?

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Is Warren Buffett bailing on airlines?

Less than a month after making a contrarian bet by buying Delta Air Lines (DAL) - Get Report on its coronavirus-inspired downward drop, Warren Buffett’s Berkshire Hathaway (BRK.A) - Get Report (BRK.B) - Get Report has sold some of its stake, marking an about-face view of an industry that has been paralyzed by the coronavirus pandemic and corresponding drop in travel.

A Securities and Exchange Commission filing revealed that the famed value investor’s conglomerate sold a chunk of its approximately 11% stake in Delta – shedding roughly one-fifth of its stake, or approximately $390 million.

The company also sold a smaller stake in Southwest Airlines (LUV) - Get Report, reducing its stake in the airline by just over 4%, another SEC filing showed.

The sales mark a surprisingly rapid about-face for Buffett, who just a month ago grabbed headlines when his conglomerate boosted its stake in Delta as shares of airlines both in the U.S. and abroad were posting unprecedented price declines amid the coronavirus-induced stock market rout.

Since then, however, airlines and virtually all other sectors of the economy have experienced unprecedented drop-offs in activity as the onslaught of the coronavirus brought first Europe and then North America to an economic standstill.

Delta on Friday said it expects revenue over the next three months to be down 90%, with no end of the industry's troubles in sight.

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