> Warren Buffett Blog: Buffett buys shares in American Airlines, Delta Airlines and United Airlines

Wednesday, November 23, 2016

Buffett buys shares in American Airlines, Delta Airlines and United Airlines


Warren Buffett has updated his third-quarter portfolio Monday afternoon, revealing buys of airline companies.

The three airline stocks purchased by Berkshire were American Airlines, Delta Airlines and United Continental Holdings Inc. 

Buffett has traditionally detested airline stocks, famously saying in 2002, ”If a capitalist had been present at Kitty Hawk back in the early 1900s, he should have shot Orville Wright.”

In 2013 he said "The airline industry has situation where have very, very, very low incremental cost per seat with enormous fixed costs. The temptation to sell that last seat at a very low price is very high and sometimes it’s very hard to distinguish between that seat and the last seat. It’s labor-intensive and capital-intensive and largely commodity-type business. As Bill Miller points out, it’s been a death trap for business since Orville took off. If it ever gets down to one airline it will be a wonderful business and the question will be if having gotten down to relatively few through bankruptcy the question will be whether it is a good business yet. I don’t know the answer but I’m skeptical."