Last Updated on May 3, 2020, 10:17 AM AST by Anthony Morris
The legendary American investor, Warren Buffett has sold the entire holdings of his firm in the four major US airlines and warned that the “world has changed” for the airline industry due to the coronavirus crisis.
In comments which would send shockwaves in the financial markets which are already pulverised by the economic set back because of the outbreak, Buffett said that the outbreak could have an “extraordinarily wide” range of possible outcomes.
Shares around the world are down for another tough week as worldwide cases of the virus rise towards the 3.5 million mark, and the number of deaths comes near 250,000.
Even after the massive Central Bank and Government interventions, stock markets have still been rocked by the continuous spread of the COVID-19 coronavirus, the fall in oil prices and Donald Trump’s threats of reigniting his trade war with China.
Buffett is 89-year-old and has become famous as the Sage of Omaha for his investment skills over the past decades, and he indicated that he believed that the stock markets had still not reached the bottom of the current dip.
While speaking at the virtual annual meeting of his company Berkshire Hathaway, Buffett said that he did not provide financial support to companies as he did by buying Goldman Sachs shares during the financial crisis of 2008 because he saw nothing “attractive” enough, even after the recent fall in the markets.
The outlook appears particularly bleak for the airline industry, which has been hit by the shutdown of most of its traffic, forcing mass layoffs and even bankruptcies.
FlyBe in the UK went into administration in the early days of the crisis, and Virgin Atlantic has asked the government for a bailout. British Airways has announced mass redundancies, as has Ryanair. Virgin Australia has collapsed.
Berkshire Hathaway had held sizeable positions in the major US airlines, including an 11% stake in Delta Air Lines, 10% of American Airlines, 10% of Southwest Airlines and 9% of United Airlines at the end of 2019, according to its annual report and company filings.
Anthony Morris covers stories related to politics and regional developments. His in-depth reporting about governance and reforms makes him stand out in regional journalism, with a deep analysis of political trends and their impact on Caribbean communities.
