Six years after calling airlines “a mistake,” Berkshire bought back in — ~$2.65B into Delta.
Not a wide-moat compounder bought cheap — a contrarian re-entry into a transformed industry. In April 2020 Buffett sold Berkshire’s entire airline book at a loss and called it “a mistake.” In Greg Abel’s first quarter as CEO, Berkshire bought back in: a brand-new ~$2.65B, 6.1% stake in Delta, filed as a passive 13G.
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In April 2020 Buffett sold Berkshire’s entire airline book — Delta, United, American, Southwest — at a loss and called the original investment “a mistake.” In Greg Abel’s first quarter as CEO, Berkshire bought back in: a brand-new ~$2.65B, 6.1% stake in Delta, its 14th-largest holding, filed as a passive Schedule 13G. The headline writes itself; the analysis is more interesting than the reversal.
The read: the airline sector is no longer the capacity-glut, price-war business Buffett walked away from. Consolidation has left a handful of disciplined operators, and the industry now generates real free cash flow — Delta, its best operator, produced ~$4.6B of FY25 free cash flow while deleveraging. At ~8.7x FY25 earnings, this is a contrarian re-entry into a structurally improved industry, not a cheap wide-moat compounder. The distinction matters for how you size and hold it.
The Q1 net loss that might scare a casual reader is largely a non-operating accounting artifact — not a cash loss and not a signal about the operating business. This case uses it to teach the discipline that separates operating performance from below-the-line noise: read the cash-flow statement, isolate non-operating items, and judge the business on the cash it actually generates. Read the financials, not the headline.
Independent editorial analysis · Not affiliated with or endorsed by Delta Air Lines, Inc. or Berkshire Hathaway Inc.
This case study is independent editorial and educational analysis of publicly available information about Delta Air Lines, Inc. and Berkshire Hathaway Inc. The Baratelli Institute is not affiliated with, endorsed by, sponsored by, or otherwise connected to either company. Delta®, Berkshire Hathaway®, and related marks are the property of their respective owners. No claim is made to any such marks by the Baratelli Institute. Analysis draws exclusively on publicly disclosed information (SEC filings, 13F/13G filings, press releases, earnings call transcripts, investor materials, journalist reporting); no non-public information has been received from either company. Presented for educational and editorial purposes under principles of fair use and fair comment on publicly traded companies. Nothing in this analysis constitutes investment advice or a recommendation to buy, sell, or hold securities. Consult licensed advisors before investment decisions.
This is an educational case study, not investment advice, not a research report, not a buy/sell rating, not a price target, not an allocation recommendation. Every number traces to a public filing. The Institute is not a registered investment adviser; this is a Lowe v. SEC publisher-exception publication.
Every analytical move in this case study cross-references a Guide chapter. If you want to learn the methodology in full, the Guides are where it’s taught.
“Practitioner case studies — written by an owner, the methodology of the Guides applied to the businesses Berkshire owns, with the workpapers behind it.”