re: Berkshire Hathaway apparently unloaded their entire airline portfolio

They unloaded my arse too. I got laid off Thursday. Worked for one of their wholly owned aviation service companies.

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Demand for air travel isn't going anywhere

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It will take years for demand to reach pre-covid levels. I am not sure business travel will ever go back to the level it was at. International will take a major beating too.

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I disagree with him a lot of times but there has to be something to this move.

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It has been discussed here for weeks but some folks simply dont want to hear the truth.

The major airlines will survive, the investors equity will be wiped out in bankruptcy, this song and dance has happened before with some of these companies.

See below from 2007,

LINK

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Regular trading in the new stock is expected to begin on the New York Stock Exchange on May 3 under the symbol “DAL”.

Delta’s old shares, which had been trading over-the-counter, are being canceled. Holders of these shares will receive nothing under the reorganization plan, the company said.

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Overreaction. Airlines are by far the best mode of transportation for the public over long distances. People won’t stop going on vacation. The big difference will be businesses doing more Skype or Zoom calls instead of face to face meetings when air travel would be required. Airlines that rely on first class and business class passengers will suffer much more than airlines that are primarily personal use and economy class. American, United, and Delta come out of this a lot worse than Southwest or Spirit or other budget airlines

Bankruptcies and elimination of stock equity are absolutely a possibility. But I’d say it’s very unlikely for Southwest. If I invested in just one airline (which I have) its Southwest. They’ve got the balance sheet to whether the storm

Edit: anyone saying “Buffett is smarter than Money Talk” also needs to consider that Buffett knows his influence on the market. This could be a play to influence the market. Berkshire Hathaway could potentially buy an airline, maybe he’s looking to kill the stock price and buy one in bankruptcy. He obviously has the cash on hand to do it, but he’d be looking to get the bottom dollar price

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Upperdecker

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Best of luck old chap

Here’s the thing with Buffet, whether he’s really a genius or not, he has the financial strength and popularity to make it always seem like it was a good move.

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We have the smartest people in the world working on cures and vaccinations.

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After 35 years of working on it, there is still no vaccine for HIV/AIDS, they were unable to develop a vaccine for SARS. And other than cancer were we actually have treatments with some chance of eradicating it from the body, for most other diseases other there is no cure other than antibiotics for infections, and a few antiviral drugs. There are drugs to counteract the effects of heart disease, diabetes, hypertension, and many other diseases, but you will still have the disease.

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Exactly. People are still going to need to fly when this is all said and done.

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Watching CNBC a few weeks ago, they reported that the Airlines target to reach 75% pre-virus travel is 3-5 years. I'm not sure if that was worldwide or domestic.

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Here’s the thing with Buffet, whether he’s really a genius or not, he has the financial strength and popularity to make it always seem like it was a good move

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Exactly.

If airlines do recover he’ll just say, we looked at are risk allocation across our entire portfolio and decided we could deploy that money elsewhere. Nobody will bat an eye or question $130 billion in cash he could have deployed.

And he doesn’t GAF what others think either. My guess is there will be a contraction going forward and possibility of restructuring and he wants no part of that long term mess.