Warren is back at it with the billions. This time our godfather started investing in airlines for the first time since the 80s! 

For those of you who know Warren Buffet is a very practical billionaire and has long been against investing in the airline industry after owing some stock in them in the 80s, which he described as an unpleasant experience. So why the change of heart? 

Well Buffet was against investing in airlines for a few main reasons 

1. Too much competition (fare wars)

2. Need 80% of every flight occupied to make profit 

3. Huge amount of fixed costs (aircraft leases , airport fees etc)

4. Unpredictability of oil prices squeezing profit margins

So what changed to attracted our godfather to cough up over $10 Billion recently? 

1. Oil has gone down but airline prices have raised

2. Less competition as airline companies have merged 

3. Lowered their fix cost 

4. New sources of revenue – e.g. baggage fees

Warren has split his investment between American, Delta, United and Southwest , all besides Southwest had filed for bankruptcy previously. Anyone who has booked a flight in the past year can see why Warren Buffet has decided to pull out of brick and mortar retail stores and invest money in airlines. 

Stay tuned for more updates as the godfather continues to be busy in 2017!