Warren Buffett spent decades avoiding airline stocks. He called them a capital trap, a business where no matter how well you ran it, fuel prices and fare wars could wipe out profits in a quarter.
Then Covid hit, and Berkshire Hathawaydumped its airline holdings in 2020, locking in significant losses. “The world has changed for airlines,” Buffett said at the time.
So it means something when Berkshire (BRK.A) just turned around and invested $2.6 billion back in Delta Air Lines.
Why Berkshire bought DAL stock
When Berkshire filed its quarterly holdings disclosure with the Securities and Exchange Commission last Friday, one name stood out: Delta Air Lines (DAL).
The conglomerate built up a stake valued at approximately $2.6 billion as of the end of March 2026.
That makes it a meaningful, though not enormous, position relative to Berkshire’s largest holdings, such as Apple, American Express, and Coca-Cola.
This is Greg Abel’s first quarter running Berkshire after taking over as chief executive from Buffett in January.
In his first letter to shareholders in February, Abel laid out a clear philosophy. There are “core” positions Berkshire will not touch, he wrote, and beyond those, the firm will remain disciplined and concentrated in its investing. The Delta buy fits squarely in that mold.
Related: Berkshire CEO has sobering message for tech stock investors
Meanwhile, the firm exited several smaller holdings, including Amazon.com, Domino’s Pizza, Mastercard, Visa, and UnitedHealth Group.
Those exits, per reporting from the Wall Street Journal, appear to be positions formerly managed by Todd Combs, who departed for JPMorgan Chase.
Berkshire’s Apple stake, notably, was left untouched, snapping a three-quarter run of reductions.
Delta just had its best quarter in years
In the first quarter of 2026:
- Deltaposted record revenue of $14.2 billion, up 9.4% compared to the same period a year ago.
- Earnings came in at $0.64 per share, 40% higher than the prior year.
- The airline generated $1.2 billion in free cash flow and earned a 12% return on invested capital.
That kind of performance, in the face of a turbulent macro and geopolitical backdrop, is no accident.
Delta CEO Ed Bastian credited a deliberate pivot toward higher spending travelers.
- Corporate bookingsgrew in double digits and hit a quarterly record.
- Premium cabin demand stayed strong across domestic and international routes.
- Revenue from the airline’s American Express credit card partnershipgrew 10% to $2 billion for the quarter, driven by 12% spend growth.
Bloomberg via Getty Images
Bastian put it plainly on the company’s earnings call.
“Our consumers are continuing to prioritize experiences, with travel among the top spending categories.”
Delta’s shares are up about 37% in the last 12 months, a resilient showing given that jet fuel prices have roughly doubled due to the conflict in the Middle East.
The airline is cutting capacity on less-profitable off-peak routes and working to pass higher fuel costs through to customers via fare increases.
Berkshire owns a portfolio of quality stocks
Warren Buffett, also known as the Oracle of Omaha, has historically invested in businesses with durable competitive advantages: pricing power, loyal customers, and an ability to generate cash through economic cycles.
Delta, increasingly, fits that description.
The airline has moved aggressively to shift its customer mix toward premium travelers who are less sensitive to price swings.
- Nearly 50% of the seats on Delta’s newest aircraft are premium configurations, up from around 30% on the planes being retired.
- Its digital loyalty platform, Delta Sync, is on track to reach 110 million customer log-ins in 2026.
- Cirium ranked Delta the most on-time airline in North America for the fifth consecutive year.
- Delta also owns a refinery, which partially offsets higher fuel costs when crude prices spike, giving it a structural advantage few rivals can match.
For the second quarter, Delta expects revenue growth in the low teens on flat capacity, with operating margins between 6% and 8% and a pretax profit of $1 billion.
More Airlines:
- Spirit Airlines desperately seeks help from an unexpected source
- JetBlue makes a boarding change some may like
- Another airline shuts down for summer, cancels all flights
That would be a strong showing given the $2 billion in extra fuel expense the airline is absorbing this quarter.
Berkshire’s return to Delta says something about how the airline industry’s best players have changed.
Premium travel demand is proving more resilient than skeptics expected. And for the world’s most famous investing firm, that resilience appears to be worth $2.6 billion.
Is DAL stock undervalued?
Analysts tracking DAL stock forecast adjusted earnings to expand from $5.82 per share in 2025 to $9.22 per share in 2028.
If the airline stock is priced at 10x forward earnings, which is below its current multiple of 12.5x, it could surge 30% within the next 18 months.
Each of the 15 analysts covering DAL stock recommend a “Buy” and forecast it to gain 17% from current levels, given consensus price target estimates.
Related: Delta Air Lines made $8.2 billion from your credit card last year