Chairman of Berkshire Hathaway Inc. and billionaire investor Warren Buffett criticized United Airlines’ leadership Monday for how it responded after a man was forcibly removed from a flight.
Buffett said United made a “terrible mistake,” by how it first reacted, given that the incident was caught on film and went viral overnight.
United Airlines CEO Oscar Munoz apologized to the passenger, Dr. David Dao, saying that the company would do a “thorough review” of the incident and added that “no one should ever be treated this way.”
While Munoz “apologized many times,” his first response could have been a bit more proactive than just a simple apology, as “your first reaction is going to get a lot of attention,” Buffett said.
Berkshire Hathaway is the largest investor in United Airlines and also holds significant shares in Delta and Southwest Airlines.
One of the reasons Buffett is heavily investing in the airline industry is that it is becoming more efficient, but he realizes that often comes at the price of comfort. Airlines cram more seats into a plane, creating tighter, narrower seats.
“They may become like cattle cars,” Buffett said. “A significant percentage (of passengers) would rather be treated that way and fly for X than have far more leg room (and other benefits) and fly for X plus 25 percent.”
Buffett also criticized Wells Fargo’s leadership Saturday for lackluster handling of a firm-wide sales scandal that affected thousands of customers across the U.S.
Wells instituted a system in which sales goals “incentivized the wrong type of behavior,” Buffet said Saturday at Berkshire’s annual meeting in Omaha, Neb. The billionaire investor puts a great deal of the blame of Wells’ former-CEO John Stumpf, who Buffett says acted far too late in stopping the fraudulent scheme.
“If there’s a major problem, the CEO will get wind of it. At that moment, that’s the key to everything. The CEO has to act,” Buffett said. “The main problem was they didn’t act when they learned about it.”
Buffett’s Berkshire Hathaway is the largest investor in the American bank, holding a 10 percent stake in Wells Fargo worth nearly $27 billion.
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