Major U.S. airline stocks have dropped in pre-market trading after billionaire investor Warren Buffet revealed his firm Berkshire Hathaway dumped all of its holdings in the sector. American Airlines (NASDAQ: AAL) and United Airlines (NASDAQ: UAL) registered double-digit drops.

In Berkshire Hathaway’s (NYSE: BRK.A) annual meeting, which was conducted virtually for the first time ever, the billionaire investor noted the nearly $8 billion the firm invested in the country’s four biggest airlines was a “mistake,” and as such Berkshire dumped all of its holdings on the market.

Per Buffett, the airline business has “changed in a very major way” that will see the companies it had a stake in getting more indebted and with fewer commercial passengers, while having “too many planes.” Berkshire felt its share of the underlying warning “was a billion dollars” and felt the number “was more likely to go up than down over a period of time.” He added he was “wrong.”

We made that decision (to exit) in terms of the airline business. We took money out of the business basically even at a substantial loss, and we will not fund a company that where we think that it’s going to chew up money in the future

Buffett made it clear the firms’ CEOs weren’t to blame, but airline shareholders soon started dumping what they had as well. In pre-market trading Delta Air Lines (NYSE: DAL) has dropped 9.8%, while Southwest Airlines (NYSE: LUV) dropped 9.34%

American Airlines was seemingly the second-most affected, dropping 10.2% in pre-market trading.

AAL STOCK.pngSource: Google

United Airlines suffered even more, losing 11% of its value before the opening bell.

UAL STOCK.pngSource: Google

The International Air Transport Association (IATA) lobby group has said global airline passenger volumes in March dropped to their lowest levels since 2006, while revenues dropped nearly 53% from the same period last year.

Cargo traffic, the IATA added, was down 15% from the prior year and is likely to keep on falling in 2020. Per the organization even as countries lift travel restrictions and coronavirus cases drop, demand isn’t likely going to recover as fast as expected. U.S. airlines, it’s worth noting, received $25 billion in aid from the CARS Act last month, and are forbidden from cutting staff until October 1.

Featured image by Ashim D’Silva on Unsplash.