Kevin Lamarque / Reuters
- Warren Buffett's Berkshire Hathaway sold nearly $ 390 million in shares of Delta Air Lines and Southwest Airlines this week, new SEC filings show.
- The billionaire's company invested its stake in Delta by almost a fifth and its stake in Southwest by just over 4%.
- Berkshire's equity portfolio had an estimated $ 5 billion impact on its airline stocks in the first quarter as the novel corona virus weighed on demand and resulted in travel restrictions.
- You can find more stories on the Business Insider homepage.
Warren Buffett's Berkshire Hathaway sold nearly $ 390 million in shares of Delta Air Lines and Southwest Airlines this week, reducing the risk of an industry being hit by the coronavirus pandemic.
The famous conglomerate of investors reduced its stake in Delta from around 11% by almost a fifth from 71.9 million shares to 58.9 million. According to a filing released by the Securities and Exchange Commission on Friday.
Berkshire also sold around 2.3 million shares in the South West and reduced its stake in the airline by just over 4%. showed another SEC filing.
Delta stock sales were approximately $ 314 million, and sales in the Southwest were $ 74 million, for a total of approximately $ 389 million.
The news dropped Delta's stock by 11% and Southwest by 9% in after-hours trading.
Berkshire's equity portfolio was estimated to have an impact of $ 5 billion on its investments in the four major US airlines last quarter, as they declined an average of 52% over the period.
But the divestments are surprising. "I'm not going to sell airline stocks," Buffett said Yahoo Finance said three weeks ago. Berkshire also increased its Delta stake in late February and bought the shares at almost double the price they had sold each week.
Sales are coming as the aviation industry continues to suffer heavy losses during the Corona virus outbreak. The airlines were forced to suspend routes, cancel flights and ground planes because travel restrictions, border closures and home warnings brought air traffic to a complete standstill.
Friday's Delta CEO Ed Bastian said to employees in a memo The airline burned more than $ 60 million each day during the crisis and canceled approximately 115,000 flights in April, accounting for 80% of its overall flight schedule. Only 38,000 passengers flew on Sunday, compared to 600,000 on the last Sunday in March 2019, he wrote.
The southwest was affected in a similar way as the demand for travel decreased. CEO Gary Kelly said earlier that the airline loses money on every flight.
Both airlines have announced that they will apply for wage slips to pay workers as part of the federal coronavirus package. Under the terms of the grants, airlines are prohibited from buying back shares or paying dividends to shareholders.
Airlines that receive help through payroll grants or in the form of loans are also required to continue flying despite the low demandas part of efforts to maintain supply chains and connectivity for key travel.
(tagsToTranslate) Finance (t) Markets (t) Transport (t) Warren Buffett (t) Berkshire Hathaway (t) Delta Air Lines (t) Southwest Airlines (t) Invest (t) BITranspo