Buffett has long scoffed at the aviation industry, and Berkshire's "new king" bought $2.6 billion of Delta Air Lines.

Berkshire's "new king" has taken a $26 billion stake in Delta Air Lines, Inc. (DAL.US), marking the investment giant's third foray into the aviation industry - a departure from Warren Buffett's previous disdain for airline stocks over the past few decades. According to Berkshire's 13F filing as of March 31, 2026, submitted on May 15, 2026, the company holds 39,809,456 shares of Delta Air Lines, Inc., with a market value of approximately $26.465 billion, representing a 6.1% stake. Delta Air Lines, Inc. also confirmed this information in their own 13F filing. Following the announcement, Delta Air Lines, Inc.'s stock price saw a significant increase in after-hours trading. With nearly $400 billion in cash on hand and Berkshire Hathaway seeking investment opportunities, the market is speculating on whether the company will further increase its position in the aviation sector. At 95 years old, Buffett has stepped down as CEO, retaining the title of Chairman of the Board. The decision to invest in Delta Air Lines, Inc. was driven by the new management team, considering Buffett's past skepticism and losses in the aviation sector, making this transaction particularly notable. Buffett's "aviation phobia": from joke to creed Buffett's aversion to the aviation industry has become legendary in the investment world. In his 1996 shareholder letter, Buffett quoted Richard Branson, saying the easiest way to become a millionaire is to "start as a billionaire and then buy an airline." In 2007, reflecting on the poor investment returns in the aviation industry, Buffett even joked that a "forward-thinking capitalist" should have shot down Orville Wright in Kitty Hawk to make a contribution to humanity. He once mentioned having a hotline to call whenever he felt the urge to buy airline stocks, saying, "I'm Warren, I'm an 'aviation nut,'" and the person on the other end would talk him out of it. In Buffett's view, the aviation industry is heavily capital-intensive, highly unionized, and subject to strict regulations, with key elements of the product - airports, security checks, air traffic control, cabin standards, etc. - largely determined or provided by the government, resulting in a weak competitive moat for the industry. Two failed attempts: from USAir to selling during the pandemic Berkshire's love-hate relationship with the aviation industry spans nearly forty years. In 1989, Berkshire invested $358 million in convertible preferred stock of American Airlines Group Inc. (USAir) with a 9.25% dividend rate, convertible into common stock at $60 per share. The investment structure made the investment appear safer than the business risks it entailed. However, from 1990 to 1994, American Airlines Group Inc. accumulated losses of $2.4 billion, nearly wiping out shareholder equity, and suspended dividends on Berkshire's preferred stock in 1994. Berkshire subsequently wrote down the investment by 75%. Buffett later characterized this transaction as a "non-forced error" and "careless analysis." Ultimately, Berkshire barely recouped its principal, which Buffett admitted was mostly luck. In 2016, Berkshire re-entered the aviation industry, holding stakes in American Airlines Group Inc., Delta Air Lines, Inc., United Airlines, and Southwest Airlines Co. The rationale at that time was industry consolidation, multiple bankruptcies and restructurings, and self-discipline in capacity, making buying aviation stocks at discounted values potentially profitable - Buffett did not change his view that aviation was a challenging business but found the timing opportune. By the end of 2019, Berkshire held approximately 11% of Delta Air Lines, Inc., 10% of American Airlines Group Inc., 10% of Southwest Airlines Co., and 9% of United Airlines. In April 2020, Berkshire completely divested from these holdings, resulting in significant losses, and explicitly stated its reluctance to continue providing funds to companies that would continue to burn cash. Third time's the charm: the new leadership's move The investment in Delta Air Lines, Inc. this time was a decision made under the leadership of the new management team at Berkshire. In terms of scale, $26 billion is just a drop in the bucket compared to Berkshire's massive cash reserves of around $400 billion. How to effectively deploy this cash is the core challenge facing the new management. Delta Air Lines, Inc.'s position ranks as Berkshire's 14th largest investment, indicating a tentative positioning in its allocation priorities. Of note, unlike the diversified holdings in 2016, this time Berkshire only chose Delta Air Lines, Inc., with higher concentration and a more specific intention. Delta Air Lines, Inc. appears eager to disclose this information, as they were the first to publicly announce it in their 13F filing. This marks Berkshire's third attempt in the aviation industry. With the pressure of having such a large cash reserve, observers are closely watching to see if the new management will further increase its position in the aviation sector. This article is a reprint from "Wall Street View" and edited by GMTEight: Li Junling.