Berkshire Hathaway, under the new helm of Greg Abel, has made a surprising investment move as outlined in a Friday regulatory filing. The company has purchased a $2.65 billion stake in Delta Air Lines in Q1, its first significant airline investment since Warren Buffett's step down as CEO. Buffett, known for his initial reluctance to invest in airlines, remains involved in investment decisions, making this considerable buying of 39.8 million Delta shares noteworthy.
This investment move comes in sharp contrast to Buffett’s past statements about the airline industry. In 2007, he famously wrote, "A durable competitive advantage has proven elusive ever since the days of the Wright Brothers." Despite this, Berkshire Hathaway had significant stakes in numerous airlines such as American, Delta, Southwest, and United, all of which were sold during the 2020 pandemic-induced market downturn.
However, the present situation sees Berkshire navigating on a massive cash pool of, a record $397.38 billion in Q1, and the past profit record of $5 billion by Delta in fiscal 2025. This makes executives believe that the timing is perfect for airline investment. Still, it's important to note that Delta has been struggling, posting losses last year and experiencing a challenging Q1.
Even though Delta shares saw a lacklustre performance with only a 1% gain in 2026 amid rising jet fuel prices, this move by Berkshire might signal a renewed confidence in the renewal of the airline industry.