Sky Talk

Billionaire Warren Buffett takes flight with airline stocks


Billionaire Warren Buffett has changed his mind about airlines.

On Monday, Buffett’s Berkshire Hathaway disclosed it has made significant investments in the nation’s three largest carriers: American Airlines, Delta Air Lines and United Continental.

In its quarterly filing with the Securities and Exchange Commission, Berkshire Hathaway said it owned 21.7 million shares of Fort Worth-based American (ticker: AAL) worth about $797 million as of Sept. 30. Based on Monday’s closing price of $43.40, the investment is currently worth $944.8 million.

American said the carrier welcomed the billionaire’s investment, saying it validates its plan to improve the customer experience for passengers.

“This investment further reinforces our view that our industry has fundamentally changed in a profound and lasting way, and we know delivering long-term financial success will provide continued evidence of this fact,” the airline said in a statement.

Berkshire Hathaway also holds 6.3 million shares of Delta and 4.3 million shares of United, worth $249.3 million and $237.8 million respectively as of Sept. 30.

“Delta welcomes new investors as we continue to build a model for sustainable, long-term success as a high-quality global company that consistently produces solid returns,” the Atlanta-based carrier said in a statement.

Buffett long had a distaste for airline stocks stemming from his $358 million investment in USAir preferred stock in 1989 which performed poorly for years. He did sell the investment in 1998 for a “hefty gain” and the airline filed for bankruptcy twice after that, eventually merging with America West Airlines in 2005. and later American.

Andrea Ahles: 817-390-7631, @Sky_Talk