Warren Buffett's Berkshire Hathaway loses more than $3 billion as coronavirus hammers airline stocks

AP Photo/Nati Harnik

• Warren Buffett's Berkshire Hathaway took another hit after President Donald Trump unveiled travel restrictions on Europe in response to coronavirus, hammering airline stocks.
• The billionaire investor's conglomerate counts Delta, Southwest, United, and American among its 25 biggest holdings, and owns more than 8% of all four companies.
• The four stocks have plunged this year, slashing the value of Berkshire's stake by about 30% or $3 billion.
• However, Buffett likes to buy quality businesses at a discount, and lower oil prices mean cheaper fuel for the airlines.
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Warren Buffett's Berkshire Hathaway suffered another blow this week after President Donald Trump announced restrictions on European travel to the US in response to the coronavirus threat, sending airline stocks into a tailspin.

The famed investor's conglomerate counts Delta Air Lines, Southwest Airlines, United Airlines, and American Airlines among its 25 biggest holdings, and the quartet made up about 4% of its portfolio at the end of December. Berkshire owned more than 8% of each of the four companies at the end of December, and together those shares were worth about $10 billion, according to Gurufocus.

However, Delta and Southwest shares have plunged more than 20% since the start of this year, while American and United shares have nosedived by more than 40%, as coronavirus fears continue to weigh on travel demand.

As a result, the value of Berkshire's holdings has dropped by around 30% to about $7 billion. Given the four stocks tumbled between 8% and 14% in pre-market trading on Thursday, Berkshire's losses are likely to widen.

Buffett won't be too worried. He recently argued that investors should celebrate the chance to buy quality stocks at a lower price. Berkshire also plowed another $45 million into Delta stock last month after it plunged 20% due to coronavirus.

The breakout of an oil-price war between Saudi Arabia, Russia, and other oil producers also promises to boost airlines' profits by slashing their fuel costs. Moreover, the Trump administration has promised to support airlines along with other industries suffering from the coronavirus outbreak.

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