• Shares in American, Delta, Southwest, and United have erased those losses and now trade above their average price in April, when Buffett ditched them.
  • Buffett sold the airlines because he wasn't sure that passenger numbers would rebound, and worried about government-loan repayments and shareholder dilution.
  • Passenger numbers are recovering, and airports and airplanes are signaling a return to normal activity levels, but the famed investor's other concerns still resonate.
  • Visit Business Insider's homepage for more stories .

Warren Buffett revealed at the start of May that he'd dumped the "big four" airlines in April, sending their stocks into freefall . They've bounced back in less than a month as investors bet the "Oracle of Omaha" made a bad call.

Shares in American Airlines , Delta Air Lines , Southwest Airlines , and United Airlines jumped last week on coronavirus vaccine hopes , then soared more than 12% on Tuesday after a raft of positive news. All four were up more than 7% in pre-market trading as of 7:30 a.m. ET on Wednesday.

The stocks have now erased their losses since Buffett announced his sales, and trade higher than their average price in April, meaning they could be worth more now than when Buffett sold them.

It's worth revisiting why Buffett ditched the "big four" airlines, and what has happened since then to justify the recent rally.

Read More: Billionaire and legendary investor David Booth: Here's how to invest smartly right now so you come out of the pandemic with financial security 'The world has changed' Buffett's Berkshire Hathaway conglomerate owned between 8% and 11% of the "big four" airlines before it ditched those positions in April. The billionaire investor announced the sales and explained them at Berkshire's shareholder meeting earlier this month. His main argument was that the investment case for the airlines has changed significantly . He questioned whether passenger numbers would fully rebound from the coronavirus pandemic in the next few years. Even if carriers returned to 80% of their capacity, he warned, they could be left with " too many planes ." Buffett also pointed to the billions of dollars in government loans taken by the carriers, which they will have to repay out of their earnings. He added that shareholders will also lose out from the the stock warrants that the airlines handed to the government, which it can exercise to buy their shares at a discount in the future . "The world has changed for the airlines," Buffett said at the Berkshire meeting. "The future is much less clear to me about how the business will turn out." Read More: GOLDMAN SACHS: These are the 20 stocks hedge funds piled into most aggressively last quarter and history suggests they're set for big gains Betting on recovery Investors shrugged off Buffett's concerns on Tuesday, adding $6 billion to the "big four" airlines' market capitalizations. Early signs of passenger numbers rebounding, travel restrictions being eased, flights resuming, and carriers adapting to the pandemic may explain their renewed optimism: The Transportation Security Administration reported more than 300,000 travelers passed through its airport checkpoints last Thursday, the most traffic in two months. Moreover, average daily passengers climbed to about 265,000 last week, the highest number since late March. Several Asian and European governments intend to loosen restrictions on overseas travelers starting in July. For example, Spain plans to lift its two-week quarantine on international arrivals, while Vietnam will resume issuing e-visas to visitors from 80 countries. European carriers including British Airways-owner International Consolidated Airlines, Lufthansa, Ryanair, and Air France-KLM plan to ramp up their flight schedules by July, Forbes reported earlier this month . United has partnered with Clorox and Cleveland Clinic in an effort to keep its planes clean and its passengers safe and healthy. While those developments are certainly positive, it's too soon to say whether passenger numbers will fully recover, and Buffett's warnings about loan repayments and shareholder dilution still ring true. Read More: A Wall Street chief strategist analyzes 4 recessions throughout history to explain why investors should still be buying stocks even as the economy hurtles into depression Here's a chart showing how the "big four" airline stocks have rebounded since Buffett announced his exit: Business Insider NOW WATCH: What makes 'Parasite' so shocking is the twist that happens in a 10-minute sequence See Also: 'Likely to be excruciating': A notorious stock bear says investor reliance on Fed money-printing is misguided and warns of more than 50% crash from current levels WeWork could falter as costs spiral and social distancing hits offices, the boss of a rival real-estate group said Multiple readings of the stock market's future are near their worst levels ever. UBS says that's set up a 'significant recovery' and lays out a 2-part playbook to profit from it.