DAL - Delta Airlines

[compoundinglife]

Been looking at they value line for DAL this week. Pre corona cash flow covers dividend 10 times, around 3B in cash plus they just raised another 1B so 4B. Interest expense is ~300M, 1.7B in uncapitalized leases. 

 

Other random thoughts:

Post 9/11 it took 4 years for airlines to recover to pre 9/11 loads. Thoughts on how to think about the worst case scenario for domestic airlines with Corona? My gut is less. It will be easier to ease the fear of travelers. I don't think Corona will burn the same amount of fear into the traveling public.

 

DAL has been steadily reducing shares and it seems definite that will be the first thing to get cut if air travel tanks for an extended period of time. Then the dividend.

 

Token position increase by Berkshire.

 

Seems like a likely candidate for a BRK Pref + Warrant deal if they are desperate.

 

At todays prices, a return to normalcy in 2 years would be 20% annualized not including any dividends.

 

Anyone thinking about buying or adding here? Any other thoughts?

 

Corona isn't flying airplanes into buildings and we have a younger generation with an insatiable appetite for travel. If all we see is Corona, idk how this would take 4 years to recover. Throw in a recession and the story probably changes. The dynamics of travel and business have changed dramatically since 9/11 so I don't think this (9/11 comparison) is an overly useful lens in terms of airline travel.

 

Makes sense and I agree with you. Along the lines of history doesn't repeat it self but it rhymes, I was just looking other major incidents that impaired air travel and trying to think of worst case scenarios. I don't think this in isolation has long lasting effects. It seems like in double whammy scenario DAL is best poised to weather the storm.

 

Anecdotally. When I was flying constantly for work in the 9/11 era it seemed like most people viewed air travel as luxury or a once in a while thing. Now I see and know people across all walks of life who don't second guess flying 4-5 hours for a weekend trip.

[FCharlie]

From what I can remember, Ebola made it into the United States in 2014 and airline stocks got hit pretty hard. Looking back, however, I don't think any of the airlines lost money due to Ebola and over the next year, most airline stocks rose by 50%-100%.

 

One thing that I haven't heard much conversation about... Delta uses over 4 billion gallons of jet fuel annually. American uses about 3.5 billion. Jet fuel prices are down 50 cents per gallon since December. Yes there's a revenue hit, but there's a huge offset with fuel.

 

 

[Spekulatius]

Been looking at they value line for DAL this week. Pre corona cash flow covers dividend 10 times, around 3B in cash plus they just raised another 1B so 4B. Interest expense is ~300M, 1.7B in uncapitalized leases. 

 

Other random thoughts:

Post 9/11 it took 4 years for airlines to recover to pre 9/11 loads. Thoughts on how to think about the worst case scenario for domestic airlines with Corona? My gut is less. It will be easier to ease the fear of travelers. I don't think Corona will burn the same amount of fear into the traveling public.

 

DAL has been steadily reducing shares and it seems definite that will be the first thing to get cut if air travel tanks for an extended period of time. Then the dividend.

 

Token position increase by Berkshire.

 

Seems like a likely candidate for a BRK Pref + Warrant deal if they are desperate.

 

At todays prices, a return to normalcy in 2 years would be 20% annualized not including any dividends.

 

Anyone thinking about buying or adding here? Any other thoughts?

 

 

Corona isn't flying airplanes into buildings and we have a younger generation with an insatiable appetite for travel. If all we see is Corona, idk how this would take 4 years to recover. Throw in a recession and the story probably changes. The dynamics of travel and business have changed dramatically since 9/11 so I don't think this (9/11 comparison) is an overly useful lens in terms of airline travel.

 

We will see how Insatiable the demand is, air travel is a crowded affair from airports, airplanes, security etc. international travel is hard hit already and national travel, probably not far behind. I don’t think the change in air travel are so dramatic since 2001. If anything it has become way less convenient because of all this safety overhead and increasingly crowded planes. National travel used to be like taking public transportation and now it’s a big mess when perusing larger airports. I hate air travel now.

 

EBOLA and SARS were big issues too, but they were contained, the current one for sure has jumped the shark and is uncontained.

 

On the other hand being able to securities used aircraft for 54% LTV and pay ~2% interest rates is a pretty good dream, why would Delta even lease aircraft if they can lower their cost of capital that way. sure 54% LTV is less than 100%, but they use a mix of owned vs leased aircraft anyways and have unsecured debt - they can just swap to secured debt and pay almost nothing after inflation. Simply amazing.

[compoundinglife]

We will see how Insatiable the demand is, air travel is a crowded affair from airports, airplanes, security etc. international travel is hard hit already and national travel, probably not far behind. I don’t think the change in air travel are so dramatic since 2001. If anything it has become way less convenient because of all this safety overhead and increasingly crowded planes. National travel used to be like taking public transportation and now it’s a big mess when perusing larger airports. I hate air travel now.

 

This sounds a bit "get off my lawn". I hate air travel so everyone must hate it :) Sure the details of how planes get from A to B have not changed since 2001, and yes the security, lines, coach seats smaller, discount airlines etc... are worse. However at least in the US IMO, air travel is much more a part of people's lives now than it was in 2001. I think you will see a quick bounce back in because not being able to fly is a big hit to quality of life vs 2001. The frequency with which my friends, family and acquaintances travel is much higher now than it was in 2001. This is seen also in the culture and identity around airline status levels, points, lounges etc... I think the role air travel plays in many people's life has changed considerably over the past 20 years.

 

On a side note regarding the flying experience. I use CLEAR in the US and typically get from car to the gate in 10-15 minutes at SEA. CLEAR is not at every US airport but for me its worth every penny.

[Spekulatius]

We will see how Insatiable the demand is, air travel is a crowded affair from airports, airplanes, security etc. international travel is hard hit already and national travel, probably not far behind. I don’t think the change in air travel are so dramatic since 2001. If anything it has become way less convenient because of all this safety overhead and increasingly crowded planes. National travel used to be like taking public transportation and now it’s a big mess when perusing larger airports. I hate air travel now.

 

This sounds a bit "get off my lawn". I hate air travel so everyone must hate it :) Sure the details of how planes get from A to B have not changed since 2001, and yes the security, lines, coach seats smaller, discount airlines etc... are worse. However at least in the US IMO, air travel is much more a part of people's lives now than it was in 2001. I think you will see a quick bounce back in because not being able to fly is a big hit to quality of life vs 2001. The frequency with which my friends, family and acquaintances travel is much higher now than it was in 2001. This is seen also in the culture and identity around airline status levels, points, lounges etc... I think the role air travel plays in many people's life has changed considerably over the past 20 years.

 

On a side note regarding the flying experience. I use CLEAR in the US and typically get from car to the gate in 10-15 minutes at SEA. CLEAR is not at every US airport but for me its worth every penny.

 

I didn’t feel like much has changed since 2001 personally, except the experience to air travel has gotten considerably worse. I have used air travel since the mid 1980’s (first flight was to Berlin) and 2001 was definitely a watershed point in terms of making it considerably worse.

 

I do agree thar demand will snap back, but will the Goldilocks economy for airlines also snap back? The 737max grounding was the best thing that happened to airlines (at least for those that are not dependent on this particular model ), but we are seeing a demand shock, followed possibly by a recession now. Key is pricing power, which US airlines have been having abundantly - will it hold?

 

Just in terms of what has changed during the last 20 years - well that’s air travel in Europe. The discount airlines like Ryanair have changed the game, by offering dirt cheap flights from city to city. If you time it right, you can go from Frankfurt to Madrid round trip for $100 and spent a weekend there. Way faster and cheaper than taking a train now. The experience sucks too, but the pricing doesn’t. Will this come to the US like Aldi and Lidl came to Europe? I have some doubts that pricing power for US airlines will hold, but we will see.

[Jurgis]

Just in terms of what has changed during the last 20 years - well that’s air travel in Europe. The discount airlines like Ryanair have changed the game, by offering dirt cheap flights from city to city. If you time it right, you can go from Frankfurt to Madrid round trip for $100 and spent a weekend there. Way faster and cheaper than taking a train now. The experience sucks too, but the pricing doesn’t. Will this come to the US like Aldi and Lidl came to Europe? I have some doubts that pricing power for US airlines will hold, but we will see.

 

I think this is already in US although possibly not to the same extent. Look at SAVE special deals. I am talking last couple years pre-coronavirus. You can get $49 one way BOS-Chicago IIRC. Possibly even cheaper. I don't follow it much, but look at https://www.spirit.com/ and you'll see tons of <$100 RT deals (some of which might be covid caused, but some were there pre covid). Yeah, it's with all similar restrictions/fees/crap as Ryanair. And possibly worse days than Ryanair - maybe not weekend round-trip. But it's there. SAVE also have similar deals to south including some to Caribean and LatAm. LatAm might not be $100 RT since it's longer. And maybe it's less prevalent for coast-to-coast routes since these are longer. But I think if you time it very right, JBLU might have some cheap coast-to-coast too.

 

I also mostly hate flying nowadays especially with all the crap budget most airlines throw at you, so I don't track these sales much. But AFAIK they are there.

And I mostly love JBLU. Though it's not a really crap budget airline.  8)

[Castanza]

Just in terms of what has changed during the last 20 years - well that’s air travel in Europe. The discount airlines like Ryanair have changed the game, by offering dirt cheap flights from city to city. If you time it right, you can go from Frankfurt to Madrid round trip for $100 and spent a weekend there. Way faster and cheaper than taking a train now. The experience sucks too, but the pricing doesn’t. Will this come to the US like Aldi and Lidl came to Europe? I have some doubts that pricing power for US airlines will hold, but we will see.

 

I think this is already in US although possibly not to the same extent. Look at SAVE special deals. I am talking last couple years pre-coronavirus. You can get $49 one way BOS-Chicago IIRC. Possibly even cheaper. I don't follow it much. Yeah, it's with all similar restrictions/fees/crap as Ryanair. And possibly worse days than Ryanair - maybe not weekend round-trip. But it's there. SAVE also have similar deals to south including some to Caribean and LatAm. LatAm might not be $100 RT since it's longer. And maybe it's less prevalent for coast-to-coast routes since these are longer. But I think if you time it very right, JBLU might have some cheap coast-to-coast too.

 

I also mostly hate flying nowadays especially with all the crap budget most airlines throw at you, so I don't track these sales much. But AFAIK they are there.

And I mostly love JBLU. Though it's not a really crap budget airline.  8)

I agree Jurgis, that model basically already exists.

 

Anecdote experience with Spirit:

 

I've flown Spirit a few times. The customer service is terrible for sure but it's tolerable if your flight it under 4 hours. If you're tall like me (6'3" 195lbs) anything over 4 hours it quit uncomfortable. I try to get that sweet sweet emergency exit row if it's available. I'm not sure if they do connecting flights, but I wouldn't trust them to get my bag on the next plane. They also revamped their checking process recently and left me questioning whether or not I would fly with them ever again. Probably, because I'm cheap. You wait in line for a kiosk to self tag your bag then wait in another line to print your boarding pass and then another line to hand in your bag...makes no sense at all. I have noticed that their carry-ons are often more expensive than checked bags. They push their credit card hard on every flight and there are always tons of people signing up or at least filling out the pamphlet.

 

Baltimore -> Cancun last year for $100 a ticket plus $12x2 seat selection and 60$ checked bag round trip. That's dirt cheap. (4hrs)

 

Baltimore -> Chicago for $72 a ticket $12x2 seat round trip (weekend trip). They are generous with personal item size, so I didn't have to check a bag or pay for a carry-on (2hrs)

 

Baltimore -> Orlando for something like $65 a ticket $12x2 seat $60 checked bag. (2hrs)

 

For all the annoyances, constant advertisement badgering, unorganized lines etc. the planes are always packed to the brim. 4 hours is the sweet spot for me. Once you go over that I'd imagine people (including myself) will look elsewhere.

 

I've flown Frontier and it's basically the same experience. Clark Howard has some decent consumer perspective reviews on airlines.

[Ross812]

Just in terms of what has changed during the last 20 years - well that’s air travel in Europe. The discount airlines like Ryanair have changed the game, by offering dirt cheap flights from city to city. If you time it right, you can go from Frankfurt to Madrid round trip for $100 and spent a weekend there. Way faster and cheaper than taking a train now. The experience sucks too, but the pricing doesn’t. Will this come to the US like Aldi and Lidl came to Europe? I have some doubts that pricing power for US airlines will hold, but we will see.

 

I think this is already in US although possibly not to the same extent. Look at SAVE special deals. I am talking last couple years pre-coronavirus. You can get $49 one way BOS-Chicago IIRC. Possibly even cheaper. I don't follow it much. Yeah, it's with all similar restrictions/fees/crap as Ryanair. And possibly worse days than Ryanair - maybe not weekend round-trip. But it's there. SAVE also have similar deals to south including some to Caribean and LatAm. LatAm might not be $100 RT since it's longer. And maybe it's less prevalent for coast-to-coast routes since these are longer. But I think if you time it very right, JBLU might have some cheap coast-to-coast too.

 

I also mostly hate flying nowadays especially with all the crap budget most airlines throw at you, so I don't track these sales much. But AFAIK they are there.

And I mostly love JBLU. Though it's not a really crap budget airline.  8)

I agree Jurgis, that model basically already exists.

 

Anecdote experience with Spirit:

 

I've flown Spirit a few times. The customer service is terrible for sure but it's tolerable if your flight it under 4 hours. If you're tall like me (6'3" 195lbs) anything over 4 hours it quit uncomfortable. I try to get that sweet sweet emergency exit row if it's available. I'm not sure if they do connecting flights, but I wouldn't trust them to get my bag on the next plane. They also revamped their checking process recently and left me questioning whether or not I would fly with them ever again. Probably, because I'm cheap. You wait in line for a kiosk to self tag your bag then wait in another line to print your boarding pass and then another line to hand in your bag...makes no sense at all. I have noticed that their carry-ons are often more expensive than checked bags. They push their credit card hard on every flight and there are always tons of people signing up or at least filling out the pamphlet.

 

Baltimore -> Cancun last year for $100 a ticket plus $12x2 seat selection and 60$ checked bag round trip. That's dirt cheap. (4hrs)

 

Baltimore -> Chicago for $72 a ticket $12x2 seat round trip (weekend trip). They are generous with personal item size, so I didn't have to check a bag or pay for a carry-on (2hrs)

 

Baltimore -> Orlando for something like $65 a ticket $12x2 seat $60 checked bag. (2hrs)

 

For all the annoyances, constant advertisement badgering, unorganized lines etc. the planes are always packed to the brim. 4 hours is the sweet spot for me. Once you go over that I'd imagine people (including myself) will look elsewhere.

 

I've flown Frontier and it's basically the same experience. Clark Howard has some decent consumer perspective reviews on airlines.

 

I've flown frontier four times. On two occasions my flight back from Orlando was canceled and I could be rebooked 2 days later.

 

Aside from the passenger (dis)comforts, they are scraping the bottom of the barrel for pilots. The legacy airlines pay 2 to 3 times the 85k a Frontier pilot makes. Maybe that's why they cancel flights if there is any kind of weather.  ;)

[Gregmal]

Hello,

 

On behalf of our 23,000 crewmembers at JetBlue, I want to thank you for flying with us. The fact that you trust JetBlue with your travel inspires us to deliver the signature JetBlue experience that has been our calling card for two decades.

 

I want to personally let you know that safety—your safety—is, and always will be, job one at our airline. Not only is safety built into the DNA of everything we are as a company, but that priority bears repeating in the face of any challenge, including the concerns posed by coronavirus (COVID-19). At JetBlue, we have worked for years to ensure the safety of our crewmembers and customers. Since January, our pandemic response team has been activated to ensure we are working closely with government agencies, our own infectious disease medical staff, and in coordination across the entire JetBlue family to support our customers during their travels. To that end, I want to share some of the steps we are taking.

We were the first U.S. airline to suspend our change/cancel fees across all fare types in all markets so that you, our valued customers, could book with confidence should your travel plans change. Currently, all change and cancel fees for travel through 4/30/20 are waived, regardless of when you purchased your ticket. And, there are no change or cancel fees on new flights booked through 3/31/20 for travel until 9/8/20. Our customer support team is ready to support you with adjustments if you need assistance.

We know how important cleanliness is during these times. To offer you peace of mind, we have increased aircraft cleaning each night, including the walls, windows, window shades, galleys, lavatories and floors. We are applying disinfectant that is effective against coronavirus across aircraft interiors including the places customers touch most - the tray tables, seat covers, armrests and seatbelts.

All of our aircraft are equipped with hospital-grade high-efficiency particulate air (HEPA) filters. All recirculated air is passed through these filters before re-entering the cabin or being mixed with fresh air. All of the air in the cabin is, on average, completely changed every three minutes.

We have updated our inflight service standards. We've increased the availability of sanitizing wipes on board, temporarily suspended hot towel service, and you can expect to see our inflight crewmembers wearing medical-grade gloves during the service delivery to further limit contact points.

In our airports, we are disinfecting common surfaces more frequently and we are making hand sanitizer and disinfecting wipes widely available throughout our terminals. We are encouraging customers to self-scan boarding passes - you can download a mobile boarding pass on the JetBlue app.

As of today, authorities have not announced travel restrictions to any destinations where we fly. Some countries, including the U.S., have restrictions in place for customers who have recently been to certain international destinations. Please monitor these closely.

 

You can always find our latest coronavirus information on our blog. You can also learn more about the coronavirus and specific information for travelers on the Centers for Disease Control and Prevention (CDC) website.

 

Your confidence in JetBlue inspires us to deliver the safe JetBlue experience you've always known. We at JetBlue never take for granted your travel decisions and look forward to welcoming you on board soon.

 

Regards,

 

Joanna Geraghty

 

Joanna Geraghty

President & Chief Operating Officer, JetBlue Airways

 

 

 

.............

 

 

Received the above email from jetBlue. I think as usual, information will go a long way once people regain their sanity. Right now they just have too much info(much of it wrong) and it happened in too short a period of time(for most folks). In time this should pass and people will likely fly again, perhaps sooner than maybe we expect.

 

 

[Castanza]

Same thing from Spirit. Emphasis on the last paragraph.

 

While the effects of this virus are serious, we've seen and learned from others like it before. In the past decade we've weathered the Swine Flu, the Bird Flu, Ebola and more, so while this virus is significant, we'll get through it together, just like we have the rest. We remain dedicated to serving you every day with the same commitment to our values you've come to know.

 

I look forward to seeing you on a Spirit flight soon.

 

Ted 

Ted Christie

President and Chief Executive Officer, Spirit Airlines

 

[DocSnowball]

Started a 1% position in Delta, hoping to build more over the next month. This was in my inbox March 9th at 7:30 am from Delta:

 

Our Commitment to You During COVID-19 and Always

 

Dear xxx,

 

As a valued member of the Delta family, I appreciate the trust you place in us and our people worldwide when you travel.

 

In the current environment, it’s important for all of us to travel smarter and more consciously. That’s why I want to personally update you on the situation with COVID-19 (the coronavirus) and the steps we are taking to ensure your health and safety in your travels.

 

For more than a decade, Delta has been preparing for such a scenario. As a global airline, we have strong relationships in place with health experts including the Centers for Disease Control (CDC), the World Health Organization (WHO), the Federal Aviation Administration (FAA) and local health authorities worldwide. We are in constant contact with them to make sure our policies and procedures meet or exceed their guidelines.

 

Operations are our lifeblood. We’ve learned from past experience with outbreaks like H1N1 and Ebola, and have continually refined and improved our ability to protect our customers. That includes the way we circulate clean and fresh air in our aircraft with highly advanced HEPA filters, the new fogging procedures in our cleaning process, how we sanitize aircraft between flights and how we respond if a customer is displaying symptoms.

 

A full report on the measures Delta is taking to help you have a healthy flying experience is available here. It outlines our expanded cleaning and disinfecting at our airports and on board our aircraft; distribution of hand sanitizer and amenity kits to help customers stay clean; and the technology on our aircraft to filter and replace cabin air.

 

A command center in Atlanta has been stood up to guide our response, leading our global team of thousands of Delta professionals dedicated to this effort. That includes our reservations specialists handling thousands of incoming calls, our flight crews and Airport Customer Service (ACS) agents taking extra care of our customers, and our TechOps and operations coordination teams keeping the airline moving. This world-class group of airline employees has your back, and I have never been prouder of the women and men of Delta.

 

To ensure you always have access to the latest information and guidance, we have a website on the COVID-19 situation that is continually being updated with cleaning policies and actions we’re implementing to keep you safe, ways you can stay healthy while flying, and changes to our flight schedules and waiver information. Transparency is one of our core values, and we are committed to keeping you fully informed as the situation evolves.

 

While we’re committed to providing you with information you need to make informed decisions around your travel, we also understand the need for flexibility based on your individual circumstances. To make sure you can travel with confidence, we’re offering flexible waivers, and we’ve also adjusted our network in response to guidance from the State Department.

 

We understand that in today’s world, travel is fundamental to our business and our lives, which is why it can’t – and shouldn’t – simply stop. I believe Delta’s mission of connecting the world and creating opportunities is never more important than at times like this.

 

Thank you for your continued trust in Delta, and I look forward to seeing you in my own travels throughout the year.

 

Sincerely,

 

Ed Bastian

 

Ed Bastian

CEO

 

COVID-19 Updates: 

https://news.delta.com/coronavirus-news-our-commitment-customers

[EricSchleien]

What do you guys think the risk is of Delta's equity being wiped out during this crisis?

[RadMan24]

What do you guys think the risk is of Delta's equity being wiped out during this crisis?

 

1%

 

Edit: Barron's over weekend: https://www.barrons.com/articles/airline-stocks-arent-a-buy-yet-heres-watch-to-watch-for-51584145003?mod=past_editions

 

Delta is another airline to have an investment-grade balance sheet, and that should serve it well during this health and economic crisis.

 

The airline has structural advantages in its favor. It dominates its major hubs, which include Atlanta and Salt Lake City, and that has helped it earn the highest profit margin of legacy airlines in recent years. Its credit-card partnership with American Express (AXP) is also highly profitable, and produces recurring cash flows that are largely uncorrelated to its core business—though spending would decline if the economy slows. Delta’s dividend could also be suspended, which would save it about $1 billion annually.

 

Delta has other options, though. It’s reducing capacity, and using this moment to retire older jets it had been looking to take out of service. It has also initiated a hiring freeze. The company is targeting $4 billion in cost reductions this year, plus over $3 billion in free-cash-flow savings from deferred capital expenditures, voluntary pension funding, and the suspension of share buybacks.

 

While Delta withdrew guidance for 2020, the airline expects to have at least $5 billion of liquidity by the end of the quarter, with about $20 billion in unencumbered assets that can be tapped later on. It has more debt than Southwest—some $17 billion, giving it a total debt-to-Ebitda ratio of 1.9—but it’s still manageable.

 

 

At a recent conference, CEO Ed Bastian said that Delta is seeing as much as a 30% decline in bookings, and he’s prepared for worse. But he expects the company to remain free-cash-flow positive, and plans to maintain its investment-grade credit rating. “We expect demand erosion will continue in the near term,” he said, yet the airline has “built a plan that prioritizes free-cash-flow generation and preserves liquidity.”

[TwoCitiesCapital]

What do you guys think the risk is of Delta's equity being wiped out during this crisis?

 

1%

 

My guess is Buffett saves them before the govt. American airlines on the other hand ...

[Xerxes]

Listening to Trump today I think government intervention is far likelier in airline than Boeing.

Boeing will likely be saved by private sector

 

My gut feeling

[RadMan24]

Just to add more about Buffett's thoughts.

 

https://finance.yahoo.com/news/warren-buffett-i-wont-be-selling-airline-stocks-142849303.html?soc_src=social-sh&soc_trk=tw&mod=article_inline

 

Warren Buffett likes airline stocks despite the recent dramatic sell off so don’t expect Buffett to dump his shares.

 

“I won’t be selling airline stocks,” he told Yahoo Finance editor-in-chief Andy Serwer this week.

 

Boeing is a whole different animal. Airlines, even American (which has $7 or so billion in cash on hand) have assets they can leverage (like Ford did in recession) to make it through the downturn prior to wiping out equity (which also implies a horrendous scenario).

[mwtorock]

 

WB is waiting for his preferred shares specials

 

Just to add more about Buffett's thoughts.

 

https://finance.yahoo.com/news/warren-buffett-i-wont-be-selling-airline-stocks-142849303.html?soc_src=social-sh&soc_trk=tw&mod=article_inline

 

Warren Buffett likes airline stocks despite the recent dramatic sell off so don’t expect Buffett to dump his shares.

 

“I won’t be selling airline stocks,” he told Yahoo Finance editor-in-chief Andy Serwer this week.

 

Boeing is a whole different animal. Airlines, even American (which has $7 or so billion in cash on hand) have assets they can leverage (like Ford did in recession) to make it through the downturn prior to wiping out equity (which also implies a horrendous scenario).

[RadMan24]

 

WB is waiting for his preferred shares specials

 

Just to add more about Buffett's thoughts.

 

https://finance.yahoo.com/news/warren-buffett-i-wont-be-selling-airline-stocks-142849303.html?soc_src=social-sh&soc_trk=tw&mod=article_inline

 

Warren Buffett likes airline stocks despite the recent dramatic sell off so don’t expect Buffett to dump his shares.

 

“I won’t be selling airline stocks,” he told Yahoo Finance editor-in-chief Andy Serwer this week.

 

Boeing is a whole different animal. Airlines, even American (which has $7 or so billion in cash on hand) have assets they can leverage (like Ford did in recession) to make it through the downturn prior to wiping out equity (which also implies a horrendous scenario).

 

haha yea no doubt he's there for a backstop if needed.

[Foreign Tuffett]

Berkshire selling

 

https://www.sec.gov/Archives/edgar/data/27904/000120919120023250/xslF345X03/doc4.xml

[Castanza]

Berkshire selling

 

https://www.sec.gov/Archives/edgar/data/27904/000120919120023250/xslF345X03/doc4.xml

 

Fuck

[Guest roark33]

This will be the last filing, he went under 10%, but I suspect he dumps the rest over the next couple of days, I am sure volume will be elevated on Monday and he will sell the rest.  Once he changes his mind, he just wants out. 

[Spekulatius]

Smart move. In my opinion, DAL is likely a zero. They will run out of cash by fall. LUV will last longer but even they could be done in winter or spring.

[Castanza]

Smart move. In my opinion, DAL is likely a zero. They will run out of cash by fall. LUV will last longer but even they could be done in winter or spring.

 

I think it was UAL who said they are burning 60m a day. That’s craziness

[Spekulatius]

Smart move. In my opinion, DAL is likely a zero. They will run out of cash by fall. LUV will last longer but even they could be done in winter or spring.

 

I think it was UAL who said they are burning 60m a day. That’s craziness

 

It is the consequence of having a high operational leverage. It is deadly in a time like this. A lot of business are in the same boat. I wonder about stuff like steel mills. They continue to operate, but where does the product go? At some point they need to shut down. Scary.

[FCharlie]

So two weeks ago Buffett says he won't sell any airline stocks and today we get the form 4 showing 13 million DAL shares sold.

 

Perhaps this is not Buffett but rather Todd or Ted?

 

Either way, I expect this takes a lot of the optimism away from the airline investors who followed Buffett into this trade.