Warren Buffett Famously Bailed On Airlines in 2020. Now Berkshire Just Bet $2.65 Billion on Delta. Time to Buy?

In May 2020, Warren Buffett told Berkshire Hathaway (NYSE: BRKB)(NYSE: BRKA) shareholders that the conglomerate had sold its entire stakes in Delta Air Lines (NYSE: DAL), American Airlines, United Airlines, and Southwest Airlines. "The world has changed for the airlines," he said at the company's virtual annual meeting, calling the original positions a mistake.

Six years later, Berkshire is back.

On Friday, the conglomerate filed its first 13F under new CEO Greg Abel, who took the helm from Buffett at the start of 2026. One big surprise: an entirely new $2.65 billion position in Delta. The 39.8 million-share stake instantly makes the Atlanta-based carrier Berkshire's 14th-largest holding and a 6.1% owner of the airline.

A position this size is meaningful enough for investors to take seriously. So, is it time to follow Berkshire into the stock?

Image source: Getty Images.

A different airline than 2020

The Delta of 2020 was a passenger airline trying to fill seats during a near-total collapse in travel. The Delta of today looks materially different.

The company has spent the past several years moving away from a mass-market model and toward higher-margin revenue streams that look less like an airline and more like a brand with a loyalty engine. In the most recent quarter, Delta's diversified, high-margin revenue streams -- including premium products, loyalty, American Express remuneration, cargo, and maintenance work for other airlines -- represented 62% of total revenue and grew in the mid-teens year over year.

Premium products in particular are driving the narrative. Premium revenue rose 14% year over year in the first quarter, building on a milestone hit in the fourth quarter of 2025, when premium products revenue exceeded main cabin revenue for the first time in the company's history. Loyalty revenue grew 13%, and American Express remuneration -- the cash Delta receives from its co-branded card partnership -- topped $2 billion for the period, up 10%.

And Delta's overall results were strong. The airline's non-GAAP (adjusted) operating revenue for the first three months of 2026 hit a record $14.2 billion, up 9.4% year over year and accelerating sharply from the 1.2% adjusted operating revenue growth posted in the fourth quarter of 2025. Adjusted earnings per share of $0.64 climbed about 40% compared to the year-ago period.

"Our results underscore the power of Delta's brand and the durability of our financial foundation," said CEO Ed Bastian on the company's April earnings call.

Just as notably, main cabin unit revenue grew year over year for the first time since the end of 2024 -- a sign the recovery is finally extending beyond the front of the plane.

Near-term headwinds and a discounted price

The Delta story, however, isn't without complications. The conflict in the Middle East has sent jet fuel prices to roughly double their year-ago levels, and Delta now expects more than $2 billion in additional fuel costs in the second quarter alone. The company is responding by trimming capacity and pushing through higher fares to recapture 40% to 50% of the increase.

One asset helping Delta navigate the shock is the company's Pennsylvania-based Trainer refinery, which turns crude into jet fuel for the airline. Management expects the operation to deliver roughly $300 million of cost relief in the second quarter -- a structural hedge that isn't available to peers.

"And while the recent fuel spike is currently impacting earnings, I'm confident this environment ultimately reinforces Delta's leadership and accelerates long-term earnings power," Bastian said on the same call.

Importantly, management said it was still early to update its full-year 2026 outlook. Its prior adjusted earnings per share guidance of $6.50 to $7.50, however, implies about 20% earnings growth at the midpoint. At a recent price of around $72, the stock trades for roughly 10 times earnings -- well below the broader market's price-to-earnings ratio multiple.

Risks remain, of course. The airline business is cyclical, and a slowdown in corporate or premium leisure travel could quickly pressure the very mix that makes the current story compelling.

But for patient investors, this looks like a reasonable spot to follow Berkshire in. The business the conglomerate just stepped into appears meaningfully more durable than the industry Buffett walked away from in 2020, and the price seems to leave room for things to go modestly wrong -- and it's an attractive enough entry point that the long-term return could be exceptional if things go well.

American Express is an advertising partner of Motley Fool Money. Daniel Sparks and his clients have positions in Berkshire Hathaway. The Motley Fool has positions in and recommends American Express and Berkshire Hathaway. The Motley Fool recommends Delta Air Lines and Southwest Airlines. The Motley Fool has a disclosure policy.