Buffett Watch

Warren Buffett: I like airlines because they just 'got a bad century out of the way'

Warren Buffett: I like airlines because they just 'got a bad century out of the way'

These aren't last century's airline companies, and that's why legendary investor Warren Buffett is spending money on them.

"It's true that the airlines had a bad 20th century. They're like the Chicago Cubs. And they got that bad century out of the way, I hope," Buffett said Monday on CNBC's "Squawk Box." "The hope is they will keep orders in reasonable relationship to potential demand."

Buffett's Berkshire Hathaway revealed late last year in an SEC filing it had taken a stake in American Airlines, United Continental Holdings and Delta Air Lines. CNBC also reported that Berkshire had taken another stake in Southwest Airlines.

Ironically, Buffett implied he had not taken a commercial flight in several years. "We'll save that (conversation) for after the show," he said.

The Oracle of Omaha also revealed why his holding firm previously hesitated to take significant positions in the industry.

"I think there have been almost 100 airline bankruptcies. I mean, that is a lot," he said. "It's been a disaster for capital."

Southwest's stock has outperformed Delta, United and American shares since Berkshire's stakes were revealed, rising nearly 30 percent.

UAL, LUV, AAL and DAL since Nov. 14

Source: FactSet

Buffett, chairman and CEO of Berkshire Hathaway, joined "Squawk Box" to talk about a range of topics including his latest investments, the stock market and the economy, and the presidency of Donald Trump.