This is why Warren Buffett is betting big on aviation stocks

From Wall Street to Dalal Street, investors were awaiting eagerly to know why Warren Buffett, the world’s richest investor, is suddenly finding aviation stocks so hot.

Buffett answered the question at the 53rd Annual General Meeting of Berkshire Hathaway.

He said the airlines industry would have some more pricing sensibility in next 10 years and he believed airlines would operate at higher degrees of capacity in the future.

“Airlines is a fiercely-competitive industry,” he said.

Earlier, Warren Buffett’s nearly $10 billion investment in four US airlines - American Airlines Group, Southwest Airlines, United Continental Holdings and Delta Air Lines - through his company Berkshire Hathaway during the December quarter had made equity investors sit up and take note.

Back home, Indian aviation stocks have surged up to 105 per cent since the beginning of this calendar year.

On a year-to-date basis, shares of SpiceJet, InterGlobe Aviation and Jet Airways have surged 105 per cent, 36 per cent and 36 per cent, respectively, year to date.