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Warren Buffett's Berkshire Hathaway sells entire stake in US airlines

Berkshire Hathaway Inc. has sold its stakes in the four largest U.S. airline companies, Warren Buffett, the owner of the conglomerate holding company, told shareholders on Saturday. 

Berkshire Hathaway held an 11 percent stake in Delta Air Lines, 10 percent of American Airlines and Southwest Airlines, and 9 percent of United Airlines, making it one of the largest holders in those companies, according to Reuters. The company had invested around $7 billion or $8 billion in the four companies, Buffett said. 

Citing the outbreak of the novel coronavirus and what it's done to demand for air travel, Buffett said that he decided to sell those stakes because he concluded he'd made a "mistake in valuing." 

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"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."

"The airline business — and I may be wrong, and I hope I'm wrong — I think it changed in a very major way, and it's obviously changed in the fact that their four companies are each going to borrow perhaps average of at least $10 [billion] or $12 billion each," he added. 

Airlines around the world have experienced a substantial financial hit in recent months as planes stay grounded due to a rapid drop in demand. American Airlines reported a first-quarter net loss of $2.2 billion. United Airlines said its net loss was $1.7 billion. 

Buffett's holding company also reported a loss of nearly $50 billion during the first quarter, according to a U.S. Securities and Exchange Commission filing. He expressed optimism about the U.S.'s ability to recover economically during the shareholder meeting, saying, "The American miracle, the American magic has always prevailed, and it will do so again."

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At the same time, he voiced concerns about the U.S. airline industry and its ability to recover to pre-pandemic levels. 

"I don't know whether two or three years from now that as many people will fly as many passenger miles as they did," he said. 

The Trump administration and the major U.S. airlines reached an agreement last month on a $25 billion bailout to help companies weather a sudden drop in revenue. The program, which was created as part of the coronavirus stimulus package signed by President TrumpDonald John TrumpUSAID administrator tests positive for COVID-19 Kamala Harris, Stacey Abrams among nominees for Time magazine's 2020 Person of the Year DOJ appeals ruling preventing it from replacing Trump in E. Jean Carroll defamation lawsuit MORE in March, is intended to help the airlines pay staff.