Warren Buffett's Berkshire Hathaway sold nearly $390 million worth of Delta and Southwest shares this week

Theron Mohamed

April 3, 2020 10:44 PM

Warren Buffett's Berkshire Hathaway sold nearly $390 million worth of shares in Delta Air Lines and Southwest Airlines this week, new SEC filings show. The billionaire investor's company cut its stake in Delta by nearly a fifth and its Southwest holdings by just over 4%. Berkshire's stock portfolio took an estimated $5 billion hit on its airline holdings in the first quarter as the novel coronavirus hammered demand and led to travel restrictions. Visit Business Insider's homepage for more stories .

warren buffett

Warren Buffett's Berkshire Hathaway sold nearly $390 million worth of shares in Delta Air Lines and Southwest Airlines this week, reducing its exposure to an industry being hammered by the novel coronavirus pandemic.

The famed investor's conglomerate slashed its roughly 11% stake in Delta by nearly a fifth, from 71.9 million shares to 58.9 million, according to a Securities and Exchange filing published on Friday .

Berkshire also sold about 2.3 million shares in Southwest, reducing its stake in the airline by just over 4%, another SEC filing showed.

It netted about $314 million from the Delta share sales , and around $74 million from the Southwest disposals , generating a total windfall of roughly $389 million.

Berkshire's stock portfolio took an estimated $5 billion hit on its investments in the four major US airlines last quarter, as they plunged by an average of 52% in the period.

Yet the disposals are surprising: Buffett dismissed the idea he would be selling airline stocks a few weeks ago, and Berkshire added to its Delta stake in late February.

The sales come as the airline industry continues to endure heavy losses amid the coronavirus outbreak. Airlines have been forced to suspend routes, cancel flights, and ground planes as travel restrictions, border closures, and stay-at-home advisories lead to a near-halt in air travel.

On Friday, Delta CEO Ed Bastian said in a memo to employees that the airline was burning through more than $60 billion of cash every day as the crisis continues, and that it had canceled about 115,000 flights for April, or 80% of its total schedule. Last Sunday saw just 38,000 passengers fly, compared to 600,000 the last Sunday of March in 2019, he wrote.

Southwest has been similarly impacted as travel demand has fallen. CEO Gary Kelly previously said that the airline is losing money on every flight it operates.

Both airlines have said they plan to file for payroll grants under the federal coronavirus aid package, which will help pay workers. Under the terms of the grants, airlines will be prohibited from buying back stocks or paying dividends to shareholders.

Airlines receiving aid through the payroll grants, or in the form of loans, are also required to continue flying despite the low demand , as part of an effort to maintain supply chains and connectivity for essential travel.

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