Buffett says issues with Boeing jet won't hold back aviation
Investor Warren Buffett, who has major stakes in three airlines that operate the Boeing 737 Max, says safety issues with the jet won't have a long-term effect on the aviation industry.
The plane is grounded after two deadly crashes within five months. Boeing is upgrading flight-control software.
"Obviously there's a problem with this 737 Max, but Boeing, you can bet they're staying up 24 hours a day to get it worked out," Buffett said Thursday.
The 88-year-old chairman and CEO of Berkshire Hathaway praises the safety of flying, saying it's almost impossible to believe how much it has improved during his lifetime.
Berkshire Hathaway holds stakes in Delta, Southwest, United and American. All but Delta have Max jets. The firm had no Boeing shares as of Dec. 31.
Buffett, who spoke at a benefit event in Grapevine, near Dallas, said Berkshire's shares in Delta Air Lines accidentally went above his normal limit of a 10 percent stake in a company this month when the airline borrowed money to buy back stock. Then he bought more shares, and now owns 10.4 percent of the Atlanta-based carrier.
Berkshire owns 9.9 percent of Southwest, 9.7 percent of American and 8.2 percent of United. Buffett was once famously averse to investing in airlines. Many U.S. carriers went through bankruptcy in the 1990s and 2000s, but they are now solidly profitable, and there is speculation that Buffett, who began investing in them in 2016, might buy one.
"The airline industry is a very, very competitive business, and it will always be a competitive business," he said. "I don't think it's a suicidal business anymore, but it was for quite a while."