Warren Buffett dumps US airline stocks, saying
'world has changed' after Covid-19
The legendary investor indicates that financial
markets could still have further to fall as worldwide cases edge towards 3.5m
Martin
Farrer
Sun 3 May
2020 06.03 BSTLast modified on Sun 3 May 2020 07.00 BST
Warren
Buffett, the legendary American investor, has sold his firm’s entire holdings
in the four major US airlines, warning that the “world has changed” for the
aviation industry because of the coronavirus crisis.
In comments
that will send shockwaves through financial markets already pulverised by the
economic shock of the outbreak, Buffett said the outbreak could have an
“extraordinarily wide” range of possible outcomes.
Shares
around the world are poised for another torrid week as worldwide cases of the
virus creep towards 3.5 million and deaths near 250,000. Despite massive
central bank and government intervention, stock markets have been rocked by the
continued spread of Covid-19, the plunge in oil prices and Donald Trump’s
threats to reignite his trade war with China.
Buffett,
89, who has become known as the Sage of Omaha for his investment skill over the
decades, indicated that he believed stock markets had not reached the bottom of
the current dip.
Speaking at
the virtual annual meeting of his company Berkshire Hathaway from Omaha,
Nebraska, Buffett said he had not provided financial support to companies as he
did buying Goldman Sachs shares during the 2008 financial crisis because he saw
nothing “attractive” enough, even after the recent plunge 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.
But with
thousands of planes parked on tarmac across the world and no clear timetable
for the resumption of air travel, Buffett said he had sold his stocks as the
airline industry’s outlook rapidly changed.
“We made
that decision in terms of the airline business. We took money out of the
business basically even at a substantial loss,” Buffett said. “We will not fund
a company … where we think that it is going to chew up money in the future.”
Southwest,
American and United declined to comment, but Delta said in a statement it was
aware of the sale and had “tremendous respect for Mr Buffett and the Berkshire
team”. The airline added it remained “confident that the strengths that are
core to Delta’s business – our people, our brand, our network and our
operational reliability – will endure and position Delta to succeed”.
There was
some hope for the travel industry from China on Sunday, where internal travel
saw a large increase on 1 May, the first day of a long holiday weekend. The
jump in travel was led by Wuhan, epicentre of the coronavirus epidemic that
struck the country late last year.
The number
of people travelling outside their home cities leapt nearly 50% at the start of
the Labour day weekend, compared with the first day of a holiday on 4 April,
according to Reuters calculations on data from China’s internet giant Baidu.
China
reported two only new coronavirus cases for 2 May, up from one the day before,
data from the country’s national health authority showed on Sunday.
The numbers
contrasted with the rapid spread of the disease in other countries such as
Brazil where there were 4,970 new cases of the virus and 421 deaths in the 24
hours to Saturday. The nation has now registered 95,559 confirmed cases of the
virus and 6,750 deaths. New cases increased roughly 5.4% on Saturday from the
previous day, while deaths rose by roughly 6.7%.
Other
developments around the world on Sunday included:
A poll
showed most Britons want the lockdown rules to stay in place until the outbreak
is brought more under control. The total number of deaths from Covid-19 in the
UK rose on Saturday by 621 to 28,131, second only behind the US and Italy.
Boris
Johnson has revealed that doctors were making plans for how to handle a “death
of Stalin-type” scenario if his condition had got any worse while he was being
treated for Covid-19 in hospital.
European
leaders have joined together to pledge billions of euros to find a vaccine for
the virus. The leaders of France, Germany, Italy and Norway and senior EU
officials told the Independent that the outbreak had “caused devastation and
pain in all corners of the world”.
Spaniards
have been allowed out of their homes for the first time in weeks as lockdown
rules were relaxed on Saturday.
“Estava enganado”, diz Buffett. Investidor vendeu todas
as ações de companhias aéreas
ECO
14:22
"Estava enganado" disse o milionário
norte-americano relativamente ao investimento na aviação, tendo optado por
desfazer-se de todas as posições detidas nas companhias norte-americanas.
O milionário
norte-americano, Warren Buffett, assume que investir na aviação foi um erro,
tendo anunciado que se desfez de todos as posições que detinha nas quatro
maiores companhias aéreas dos EUA, em abril. O mea culpa foi feito pelo
investidor durante a reunião anual de acionistas da Berkshire Hathaway que
decorreu este sábado, depois de o conglomerado ter registado prejuízos de 49,7
mil milhões de dólares (45,2 mil milhões de euros) no primeiro trimestre.
No total, o
milionário desfez-se de posições acionistas de cerca de seis mil milhões de
dólares no setor da aviação, procurando minimizar os efeitos negativos. Ainda
assim, Warren Buffett assume que essa retirada ditou “uma perda substancial”.
O conglomerado
detinha posições importantes nas companhias aéreas, incluindo uma participação
de 11% na Delta Air Lines, 10% na American Airlines, 10% na Southwest Airlines
e 9 % da United Airlines no final de 2019, de acordo com os registos da
empresa. Tratavam-se das maiores participações detidas no setor, que foram
construídas pelo milionário norte-americano desde 2016 e após vários anos sem
olhar para a aviação.
Agora, face aos
fortes danos que abalam o setor da aviação em resultado da quase paralisação
das economias a nível global, as ações das companhias aéreas sofrem danos
pesados.
“Acontece que
estava enganado”, assumiu Warren Buffett, em declarações citadas pelo Financial
Times. “O negócio da aviação — e posso estar errado e espero estar errado — mudou
de uma forma muito importante, acredito“, acrescentou.
“Não sei se daqui
a dois ou três anos se tantas pessoas vão voar tantas milhas quantas as que
fizeram no ano passado”, interrogou-se ainda, acreditando, contudo, que caso o
negócio encolha para entre 70% a 80%, as companhias aéreas têm capacidade de
resistir.
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