Home Business Warren Buffett is too 'cynical' about airlines' coronavirus recovery, Southwest's CEO states

Warren Buffett is too ‘cynical’ about airlines’ coronavirus recovery, Southwest’s CEO states

Warren Buffett Chip Somodevilla/ Getty

  • Warren Buffett is too negative about the airline company industry’s post-coronavirus outlook, Southwest Airlines CEO Gary Kelly told CNN on Wednesday.
  • The billionaire investor’s Berkshire Hathaway conglomerate offered its stakes in Southwest and the other “huge four” providers in April, partly since Buffett wasn’t sure that demand for air travel would recover after the pandemic.
  • ” Mr. Buffett’s point is if the world ends up being as pessimistic as he said, I think you’re visiting a shrinking in travel and tourist,” Kelly said. “I’m uncertain that I sign up for that view.”
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Warren Buffett is too dismal about the airline industry’s potential customers after the coronavirus pandemic, Southwest Airlines CEO Gary Kelly said in a CNN interview on Wednesday.

The famed investor’s Berkshire Hathaway corporation disposed its stakes in Southwest, American Airlines, Delta Airlines, and United Airlines in April, Buffett exposed at Berkshire’s annual conference on Saturday. The “huge 4” airline companies have actually seen guest numbers plummet as authorities restrict travel and people prevent flying during the break out.

” I do not understand if, two or three years from now, that as lots of people will fly as numerous passenger miles as they did last year,” Buffett said.

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Kelly confessed the Berkshire CEO’s worries weren’t unfounded, but argued that a decline in flight isn’t unavoidable.

” I do not believe any person understands, and definitely that’s not an unreasonable view to take,” he stated on CNN. “It’s a cynical one. I am even more positive.”

” Mr. Buffett’s point is if the world turns out to be as downhearted as he stated, I think you’re visiting a shrinkage in travel and tourist,” Kelly continued. “I’m uncertain that I sign up for that view, I believe that this too shall pass.”

Southwest is well-prepared to weather a downturn in business and global travel, Kelly said. “We’ve got low expenses, we’ve got a strong balance sheet, we have actually got plenty of cash.”.

However, the provider will be required to slash headcount if traveler numbers do not rebound.

” If it does not enhance from here, we would have to considerably scale down,” Kelly said. “We have a great deal of cash today but we burned through practically $1 billion in the month of April.”

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