Warren Buffett, who took giant stakes in the four biggest U.S. airlines after years of criticizing the industry, said he could make “a fair amount” on the investment if carriers keep a stronger grip on fares.

The airlines are filling more of their seats than before, and labor relations have improved, the billionaire investor said Saturday. The question is whether the companies can avoid debilitating price wars after a wave of bankruptcies and mergers left fewer major competitors.

“It is no cinch that the industry will have some more pricing sensibility in the next 10 years than they had in the last 100 years, but the conditions have improved for that,” Buffett said at the annual meeting of his Berkshire Hathaway Inc. in Omaha, Nebraska. “It’s a fiercely competitive industry and the question is whether it’s a suicidally competitive industry, which it used to be.”

Buffett’s comments underscored his bet that airline consolidation will end the boom-and-bust cycle that had led Berkshire to avoid the sector. The company, which disclosed its investments in the industry in November, is the No. 1 shareholder in Delta Air Lines Inc. and United Continental Holdings Inc., and among the top investors in American Airlines Group Inc. and Southwest Airlines Co.

Pricing Rebound

There are signs the carriers are increasing their sway over fares despite competing with each other and with discount carriers such as Spirit Airlines Inc. Delta, United and Southwest each project that a closely watched gauge of pricing power will be positive this quarter for the first time since a fare war roiled the domestic market in 2015. American has led the turnaround in the measurement, known as revenue for each seat flown a mile, forecasting its third straight gain in the current quarter.

Delta’s revenue outlook helped fuel an airline rally this week, pushing a Bloomberg index of U.S. carriers to a small year-to-date gain after it advanced more than 40 percent in the second half of 2016. Buffett’s investments in Delta, American and United were made between June 30 and Sept. 30 of last year, followed by the Southwest bet.

United has triggered investor concern with plans to expand capacity as much as 3.5 percent this year, more than twice as much as much as Delta and American. An excess of seats and flights helped damp prices throughout the industry the past two years, spurring shareholder calls for carriers to slow growth to better match demand.

American spooked investors on April 26 by giving pilots and flight attendants mid-contract pay increases following complaints by employees that they were falling behind peers at Delta and United. The changes would boost spending by $930 million through 2019.

‘High Returns’

Buffett said he expected airlines to “have an industry pattern of bargaining” and cited “more labor stability” as an advantage. In the longer term, one challenge facing the companies will be a shortage of pilots, he said, responding to a question about Berkshire’s airline investments by Morningstar Inc. analyst Gregg Warren.

U.S. carriers posted their fifth straight year of profits last year, earning about $14 billion on an adjusted basis, according to data compiled by Bloomberg. Losses for the group surpassed $50 billion in the previous decade.

“They actually at present are earning quite high returns on invested capital,” Buffett said.