Airline stocks surge after Warren Buffett says he's open to buying one

  • Warren Buffett told CNBC Monday he’s open to buying an airline.
  • Shares of most major carriers spiked on the news.
  • Berkshire Hathaway already holds about $US200 billion worth of airline stocks in its portfolio.

Airline stocks surged Monday after Warren Buffett told CNBC he “wouldn’t rule out owning an entire airline.”

Here’s how the stocks were trading shortly after open:

“It’s a business that’s always subject to someone doing something very dumb competitively, and they have done it a lot in the past,” Buffett said. “The industry was suicidally competitive for decades.”

He continued, “It can turn into fierce competition that wipes out earnings, or it can be a business that’s more decent but still subject to lots of competition. And it’s really hard to know for sure how it will develop.”

Buffett’s Berkshire Hathaway already owns about $US174 million worth of four airlines, with stakes of between 8% and 10% in American, United, Delta and Southwest, according to public filings.

Airline stocks have performed well in recent months thanks to low oil prices, which have boosted their bottom lines. Shares of American have risen 18% in the past year, with the other major carriers slightly behind.

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