Berkshire Hathaway Acquires $2.6 Billion Stake in Delta Air Lines

Berkshire Hathaway Re-Enters the Airline Industry with $2.6 Billion Stake in Delta Airlines

Berkshire Hathaway Inc. has amassed a $2.6 billion stake in Delta Airlines Inc., marking a significant move into the airline industry for the conglomerate. The Omaha, Nebraska-based company purchased 39.8 million shares in the airline as of the end of March, according to a regulatory filing on Friday.

The investment, which amounts to a 6.1% stake in Delta Airlines, sent shares of the carrier up more than 3% in late trading. The airline industry is grappling with higher fuel costs following the US-Iran war, which effectively closed the Strait of Hormuz, sparking concerns over energy supply. This move also comes after Spirit Airlines Inc. ended operations earlier this month due to failing to secure emergency funding.

Under the leadership of former Chief Executive Officer Warren Buffett, Berkshire had a tense relationship with the airline industry over the decades. In 2001, Buffett joked that he would call an 800 number to declare he was an "air-o-holic" if he ever got the urge to invest in airlines again. However, in 2016, Berkshire dove into the industry again, amassing stakes in the four largest US airlines.

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Berkshire exited its holdings in Delta, Southwest Airlines Co., American Airlines Group Inc., and United Airlines Holdings Inc. in 2020 as the sector was grappling with the fallout from the Covid-19 pandemic. The filing is the first under newly installed Chief Executive Officer Greg Abel, who took the reins at Berkshire this year after Buffett stepped down following six decades at the helm.

Berkshire also exited positions in Visa Inc., Mastercard Inc., UnitedHealth Group Inc., Diageo plc, Pool Corp., and Domino’s Pizza Inc. UnitedHealth has been trying to rebuild confidence with investors after struggling to adapt to changing US government payment policies, with its stock dropping roughly 2.5% in post-market trading on Friday.

Berkshire also revealed it has amassed a stake in retailer Macy’s Inc., with shares of the department store operator jumping more than 6% in late trading on Friday. Abel has offloaded the equity holdings that were previously managed by Todd Combs, Berkshire’s former stock-picker, who joined JPMorgan Chase & Co. in December for a broad investing advisory role.

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