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(Bloomberg) — Warren Buffett’s dire airline predictions have hit close to home.After dumping his stakes in airlines earlier this year with a warning that the pandemic had unleashed fundamental change on that business, Buffett’s own Berkshire Hathaway Inc. took a roughly $10 billion impairment charge tied to Precision Castparts, its massive maker of plane parts. A vaccine may be the only remedy for the pandemic’s “particularly severe” impact on the aerospace market, Berkshire said.“The Covid-19 pandemic produced material declines in commercial air travel during the second quarter,” Berkshire said Saturday in a regulatory filing discussing second-quarter results. “Airlines responded by reducing and/or cancelling aircraft orders, which is resulting in significant reductions in build rates by aircraft manufacturers and significant inventory reduction initiatives being implemented by PCC’s customers.”At Berkshire’s annual meeting in May, Buffett announced a full reversal on his airline bet, with his conglomerate going from one of the biggest shareholders in all four major U.S. carriers to owning none. A rally in airline shares over the next month had critics including President Donald Trump saying Buffett had erred, but the S&P 500 Airlines index is down 26% since that early June high.Despite those stock sales, the Omaha, Nebraska-based company still had a significant exposure to the air travel slump through Precision, a business it bought more than four years ago in a deal valued at $37.2 billion.Now, Precision has had to restructure, including by cutting 10,000 employees in the first half of this year. The business reported a pretax loss of $78 million in the second quarter, compared to a profit of $481 million in the same period a year earlier.Berkshire expressed caution about when this pain might end.“In our judgment, the timing and extent of the recovery in the commercial airline and aerospace industries may be dependent on the development and wide-scale distribution of medicines or vaccines that effectively treat the virus,” Berkshire said in the filing.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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Berkshire, which acquired Precision for $32.1 billion in 2016 in its largest acquisition, said COVID-19 caused airlines to slash aircraft orders, resulting in significantly less demand for Precision’s products and revenue to fall by about one-third. It also said results may continue suffering as the unit undertakes an “aggressive restructuring” to shrink operations to meet lowered demand. Precision was not the only drag on Berkshire, which said the pandemic has caused “relatively minor to severe” damage to most of its more than 90 operating businesses, which include the BNSF railroad, Geico auto insurer and See’s candies.

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Senior Analyst at Aviation Data Specialist OAG John Grant joins joins Yahoo Finance’s Zack Guzman to discuss the airline industry as CNBC reports that Delta is asking flight attendants to take unpaid leave amid COVID-19.

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(Bloomberg) — Warren Buffett’s Berkshire Hathaway Inc. spent a record $5 billion buying back Berkshire’s own stock in the second quarter.Berkshire’s Class A shares, which fell in line with the S&P 500 in the first three months of the year as the pandemic spread in the U.S., fell another 1.7% last quarter while the broader index rallied 20%. Buffett said in May that repurchases weren’t more compelling, but the buybacks in the quarter suggest his thinking shifted.Key InsightsEven with buybacks that more than doubled the previous quarterly record, Berkshire’s cash pile kept growing and hit $146.6 billion. Buffett has struggled to find ways to deploy large chunks of funds into higher-returning assets.Berkshire ended up taking a more cautious approach to the broader stock market in the quarter. He sold a net $12.8 billion of shares in the quarter, including dumping his airline holdings in April.Berkshire’s businesses felt the sting of the fallout from the pandemic, with operating profit slumping 10% in the second quarter. The company also took $10 billion of impairment charges related to its Precision Castparts unit, which has been hit by the slump in air travel amid the pandemic.Unrealized gains and losses in Berkshire’s massive stock portfolio count toward the bottom line. So the S&P 500’s rally in the second quarter pushed net income to $26.3 billion.Get MoreBerkshire’s press release is here.Berkshire Class A shares were down 7.4% for the year through Friday’s close, compared with the 3.7% gain in the S&P 500.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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Microsoft and Facebook are hitting at Apple as antitrust investigations into the iPhone maker ramp up.

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Here's how to avoid high closing costs that can eat up your savings.

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