Last month we learned that Warren Buffett bought shares of American Airlines (AAL), Delta Air Lines (DAL) and United Airlines (UAL), according to Berkshire Hathaway's ([[BRK.A]], [[BRK.B]]) third-quarter regulatory filings. He also confirmed that he purchased Southwest Airlines (LUV) stock. If we look at the Dow Jones U.S. Airlines Index year to date, these allocations appear to have been well-timed.
Buffett is universally recognized as one of the most influential investors of all time, so his decision to book a flight on airlines, after blasting the industry for years, is worth examining more closely.
Protected by an Economic Moat
We can mention a couple of things upfront. Most everyone knows Buffett is a value investor. He seeks equity in companies that the market has undervalued, including airlines. As I've pointed out before, if we use price-to-earnings as our valuation metric, airlines are among the least expensive in