2020: Did Berkshire sell its entire stake in airlines?

Becky Quick: This is a question that comes from William Lewis. He said, “Please, did I understand correctly Mr. Buffett, to say that Berkshire Hathaway sold its interest in four different airlines and if so, can you name them? Can the names of those airlines be identified?”

Warren Buffett: Yeah. I wouldn’t normally talk about it, but I think it requires an explanation, and it requires an explanation that means we were not disappointed at all in the businesses that were being run and the management, but we did come to a different opinion on it. They’re the four largest US airlines, that’s American Airlines, and Delta Airlines, and Southwest Airlines, and United Continental. And I think collectively they probably, or at least 80% of the revenue passenger miles that is flowing in the United States. And they have significant international flying too, excluding Southwest. So we like those airlines, but we don’t… The world has changed for the airlines, and I don’t know how it’s changed, and I hope it corrects itself in a reasonably prompt way. I don’t know whether the Americans will have now changed their habits or will change their habits because of an extended period if it happens that we’re semi shut down in the economy.

Warren Buffett: I don’t know whether the trends toward what people have been doing by phone. I mean, it’s been seven weeks since I’ve had a haircut. It’s been seven weeks since I… More than seven weeks since I put on attire. They think I’ve been… Just a question of which sweatsuit I wear. So who knows how we come out of this. But I think that there are certain industries, and unfortunately I think the airline industry among others, that are really hurt by a forced and in fact shut down by events that are far beyond their control. Greg, would you like to add anything to that?

Greg Abel: Really nothing to add, Warren.

Warren Buffett: Okay. We got another Charlie here.

Greg Abel: I didn’t intend to use that as a line. But you’ve covered it well.

Warren Buffett: We would have bought other airlines, too, incidentally, but those were the four big ones. Those were the ones we could put some money into and we put whatever it was, seven or eight billion into it. And we did not take out anything like seven or eight billion. And that was my mistake. But it’s always a problem if there are things on the lower levels of probabilities that happen sometimes, and it happened to the airlines. And I’m the one who made the decision.

Becky Quick: But Warren, just to clarify on his question. He asked, “Did you sell your whole stake in all four of those companies?”

Warren Buffett: Oh, yeah. The answer is yes. Yeah. When we sell something, very often it’s going to be our entire stake. I mean we don’t trim positions. That’s just not the way we approach it any more than if we buy a hundred percent of a business, we’re going to sell it down to 90% or 80%. I mean, if we like a business, we’re going to buy as much of it as we can and keep it as long as we can. Well, when we change our mind… Go ahead, I’m sorry.

Becky Quick: All right, the next question… No, go ahead. When you change your mind?

Warren Buffett: Well, when we change our mind, we don’t take half measures or anything of the sort. So I was amazed at how frankly… Now, we were selling them at far lower prices than we paid. But I was amazed at the volume there. Airlines always trade in large volume relatively, but we have sold the entire positions.