Qatar Airways seeks 10 percent stake in American Airlines

Photo for illustrative purposes only. Credit: Qatar Airways/Flickr

Qatar’s national carrier plans to spend more than $800 million to purchase up to a 10 percent stake in American Airlines.

In a statement yesterday, Qatar Airways said it sees the US carrier as “a strong investment opportunity” and “a good oneworld Alliance partner.”

But American Airline’s CEO said the proposed investment was unsolicited and “confusing to our team and we don’t like that,” the Wall Street Journal reports.

Photo for illustrative purposes only. Credit: Fadi Benne

That said, AP reports that an expanded partnership between the two carriers could benefit American passengers, making it easier for example for them to travel to smaller cities in India.

Meanwhile, Qatar Airways has been hard hit by its Gulf neighbors’ recent boycott. And some analysts say the American purchase could help Qatar make further inroads with the US.

Subsidy row

American and Qatar Airways have had a contentious relationship of late.

For the past few years, US carriers have been lobbying to limit the growth of Gulf airlines into the American market, accusing them of unfair competition because of alleged government subsidies.

Photo for illustrative purposes only. Credit: Boeing

Qatar Airways, which is government-owned, has denied the accusation. So have Emirates and Etihad.

American Airlines CEO Doug Parker told the WSJ that the company’s stance on the issue would not change, even with Qatar Airways’ purchase.

Expansion plans

The Gulf carrier said it will initially buy some 4.75 percent of American on the open market, the maximum allowed without board approval.

US law allows foreign entities to own just below 25 percent of an American carrier.

Photo for illustrative purposes only. Credit: Christian Junker/Flickr

In a filing to American, Qatar Airways said it wishes to buy up to a 10 percent stake.

The rapidly expanding airline already owns 20 percent of British Airways parent company IAG. And it is working to acquire a stake in Italy’s Meridiana.

It has also recently announced plans to set up a carrier in India.

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