Warren Buffett’s Investments Speak Volumes About the Airline Industry

Warren Buffett makes another multibillion-dollar investment into four airlines that are basically the same after calling the industry a deathtrap.

Warren Buffett just dropped a ton more money in investments into the U.S. airline industry. At this point, he’s invested about $10 billion in the country’s top four airlines: American, Delta, United, and Southwest.

In 2013, Buffett called the airline industry here a “deathtrap for investors,” Business Insider said. But his change of heart isn’t the most interesting thing about his mega investments. Rather, it’s what the investments say about the U.S. airline industry.

As Business Insider notes, Buffett has spread his donations almost evenly across the four airlines, investing between $2.1 billion and $3 billion—showing that he considers the four airlines not only to be equal contenders, but also basically exactly the same. When one airline does something, the others usually follow, like when Delta switched to a revenue-based customer rewards program in 2015. American and United released an almost identical plan to Delta’s shortly after. The same thing happened with baggage fees, class distinctions, service, amenities, and seat space.

Southwest, though, has shirked this copycat mentality in favor of its own system: no bag fees, no business class, no international flights, one type of plane, and a low-cost business model. It still works, though; the four airlines are not only the largest in the country, but they’re also the largest airlines in the world. American is actually the largest in the world, having recently completed a merger with US Airways.

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