UKtravelbear

try

https://onemileatatime.com/delta-pilots-covid-19/

There is video of DL management and union reps preparing for the meeting.

"I've deleted a few incendiary questions already"

Fly_Delta_Jets

That's video of ALPA (DL Pilots' union) leaders, not DL management.

UKtravelbear

actually it’s both as per OMAAT. (Apologies for the incorrect attribution which I have now corrrecres)

”Footsge has been leaked of the preparations ... where you can see union executives and. delta management discussing how best to manage the situation.”

video not available now.

Duke787

The key is this gets him below 10% so he doesn’t have to announce any further moves to get out of his position (if that’s what he chooses).

One could interpret that as him choosing to back the UAL horse and getting below 10% let’s him further dispose of DL without having to announce it (and by extension hurting his ability to unwind and at least partially cover his losses without pushing the stock further down).

Even if he makes no further moves, going below 10% frees him from disclosure so he can consider his strategy without publicly announcing it (until or unless he goes back over 10%).

HDQDD

A blog with a (now deleted) video is hardly a reliable source. Didn’t get to see the video, but I’m not surprised to learn that it was actually union reps and not management.

As far as I know companies are not required to release the numbers of Covid-19 positives. In fact it would likely be a HIPAA and privacy violation to do so.

ss278

This is the key. He is now under the 10% threshold in both stocks. He can do whatever he wants and not have to disclose it until it’s done.

mridley2

I'm sure Buffett is doing what a lot of other savvy investors (myself included) are doing. S&P 500 and Dow Jones are currently on a fire sale. Rock bottom prices. Buy now and wait 2-5 years until we see the highs again. Likely other companies stock price will recover faster than Delta/airlines. Long Term though Delta will be fine and is a solid investment.

HDQDD

According to Bloomberg, Buffet liquidated all his airline positions. Obviously at a significant loss.

sm0421

I wonder why? I know he said his reasons. Maybe because I enjoy flying and I’m confident the airlines will return to normal once we have a vaccine and recover in 1-2 years..... to sell at at least 50% loss... maybe because he is old?

MCO Flyer

Agree, it seems crazy that he sold everything had right now, didn’t he buy in at $45? Once there is a vaccine available (hopefully in Q1 or Q2 of next year), I don’t see why people will be worried about travel. People are going to want to travel when it is safe to do so after being stuck in their homes for a long period of time.

Duke787

Just remember DL is burning $100M a day and their goal is to get that down to $50M a day (and UAL said much the same and has a goal of $30M by end of year). Travel recovery of 1-2 years is an awfully big risk when you own the amount of stock he owned in the airlines. There is so much unknown and remember airline margins are thin in the best of times, imagine what happens to those margins if social distancing reduces capacity or you have to increase expense to cover things like masks, gloves, cleaning, etc.

Sure he sold at a loss but at least he was able to get something in return -- if any airline goes to bankruptcy (which is a strong possibility), that numbers goes all the way down to $0 which is a big. And I assume he looked at those factors and decided that the $45 range was no longer an attainable valuation given the unknown (in contrast to say the energy sector when you can fairly easily envision the need for oil and gas even if people are social distancing).

Makes sense now why he sold to get below the threshold initially -- that allowed him to dump the rest without having to announce it until he got out of everything

MCO Flyer

Good point, but DL is one of the best positioned airlines to make it out of this okay. If DL has to enter bankruptcy, I’d expect that UA and AA would have already declared bankruptcy well before DL.

Duke787

True but those aren't mutually exclusive. Perhaps he sees them surviving but from a valuation standpoint, he doesn't see them being positioned to go above the $25-30 range it has been trading over the past few weeks and decided he'd rather just pull out the cash and be free to use it elsewhere or at least protect against further downside.

Not entirely unreasonable -- I would guess from a stock perspective, hotels come back before airlines (and my own discretionary, non-401k stock moves reflect that view) since hotels can accommodate travelers who don't feel safe on an airplane but are comfortable loading up the minivan and driving the family to beach and staying in a hotel room that's been (allegedly) cleaned to the new Hyatt/Hilton/Marriott standards (or BYO cleaning supplies). Plus the vast majority of business travel is done for the year (I work for an F500 and they've basically killed non-essential travel the rest of the year) so the airlines are going to struggle because even if they are able to fill the planes, it'll be mostly leisure travelers jumping on bargains and not the typical business traveler spending OPM booking a last minute fare.

Lrtalk

I suspect he recognizes the sea change coming in the way America works. Business people have realized during the shutdown that there is dramatically less need to travel for face to face business. Our clients are getting regular work as well as deals done remotely in a way they never thought was possible during this fiasco. There will be a major decline in business travel, and it will be permanent and likely do nothing but become more pronounced over time. Our company has been completely virtual and remote for sixteen years with no need for business travel whatsoever. We are on the verge of the second version of the industrial revolution, and this economy is going to skyrocket as a result of the dramatically lowered overhead go straight to the bottom line and benefit both owners and employees with more income for everyone. Chase and Morgan have already announced that, as a result of seeing how seamlessly their workforce is functioning remotely recently, they're going to significantly reduce their Manhattan physical footprint. I wouldn't want to own commercial real estate anywhere in this country right now, particularly in dense centers like Manhattan.

HDQDD

Actually already in the fourth version of the IR. https://en.wikipedia.org/wiki/Industry_4.0

Otherwise I agree with the rest of your assessment. Business travel volume won’t be the same for a long time, if ever.