Warren Buffett's Berkshire makes surprise US airline bet

Buffett said Berkshire later invested in Southwest, and was disclosing that stake to avoid misleading investors

Warren Buffett’s Berkshire Hathaway on Monday said it has bought shares in the four biggest US airlines: American Airlines Group, Delta Air Lines, Southwest Airlines and United Continental Holdings.

The investments mark an unexpected reversal for Berkshire, which has avoided the airline sector for nearly two decades after a troubled investment in the former US Air Group, a forerunner to American.

They also expand Berkshire’s bet on the US economy, and in particular transportation. Berkshire already owns the BNSF railroad and the NetJets luxury plane unit, and in January paid $32.1 billion for aircraft parts maker Precision Castparts.

According to a regulatory filing, Berkshire as of September 30 owned 21.8 million American shares worth $797 million, 6.3 million Delta shares worth $249.3 million, and 4.5 million United shares worth $237.8 million. Buffett told CNBC television that Berkshire later invested in Southwest, and was disclosing that stake to avoid misleading investors into believing he was avoiding the carrier.

It is unclear whether Buffett or one of his deputies, Todd Combs and Ted Weschler, invested in the airlines.

Shares often rise when investors perceive that Berkshire has given them its imprimatur.

Buffett usually handles larger Berkshire investments such as Kraft Heinz Co, Wells Fargo, Coca-Cola and International Business Machines.

His Omaha, Nebraska-based conglomerate also owns roughly 90 companies such as BNSF, Geico car insurance and Dairy Queen ice cream.