Berkshire Hathaway (BRK-B) has announced that it has added more shares of Delta Airlines (DAL) to its portfolio.
The company also added Delta Airlines stock to its portfolio in the fourth quarter. However, it trimmed its stake in other airlines, including American Airlines (AAL), United Continental (UAV), and Southwest Airlines (LUV). Recently, Berkshire was rumored to be picking up shares of Southwest Airlines.
Berkshire Hathaway’s chair, Warren Buffett, once held a very pessimistic view of the airline sector (SPY). In 2013, Buffett called the sector a “death trap.” Once, Buffett famously said, “If a capitalist had been present at Kitty Hawk back in the early 1900s he should’ve shot Orville Wright; he would have saved his progeny money.” Speaking with CNBC in 2017, Buffett called the sector “a disaster for capital” while expressing optimism about its outlook.
Meanwhile, there have been concerns in the aerospace sector, as two of Boeing’s (BA) 737 Max 8 models have crashed in the last five months. Several airlines across the world have grounded the model. According to Gizmodo, “Two U.S.-based carriers that operate the Max-8, American Airlines and Southwest Air, have no plans to stop using the aircraft.” According to CNBC, “Delta Air Lines joint venture partner Grupo Aeromexico said it grounded its six Boeing 737 MAX 8 aircraft.”
Berkshire Hathaway also has exposure to the aircraft manufacturing sector (GE) through Precision Castparts, which it acquired in 2015. Read Exiting Like Warren Buffett: Is It a Profitable Strategy? to analyze some of Buffett’s recent exits.
Read How Warren Buffett’s Investment Philosophy Has Evolved for more analysis.