Qatar Airways seeks 10% stake in American

New York : Qatar Airways, its Middle Eastern business pressured by a diplomatic row with neighbours, is seeking as much as a 10 per cent stake in American Airlines, the US carrier said yesterday.

The surprise investment push by Qatar Airways was disclosed by American Airlines in a securities filing Thursday saying the Qatari company planned to buy at least $808 million in American shares.

In addition, Qatar Airways’s chief executive told his counterpart at American that the carrier sought a stake of about 10 percent.

The outreach drew a frosty response from the US carrier, which said the intended purchase “was not solicited by American Airlines and would in no way change the Company’s Board composition, governance, management or strategic direction.” 

American’s bylaws require board approval to stakes of 4.75 percent or more. Qatar Airways said it would not exceed this level without board approval and would “make all necessary regulatory filings.” 

“Qatar Airways sees a strong investment opportunity in American Airlines,” the company said in a statement. 

“Qatar Airways believes in American Airlines’ fundamentals and intends to build a passive position in the company with no involvement in management, operations or governance.” At the Paris Air Show this week, Qatar Airways was named the world’s top airline for passenger service by Skytrax, a closely-watched industry prize. 

American has had its differences with Qatar Airways, among other Middle Eastern carriers, over state subsidies the US air travel industry says violate international agreements. 

American chief executive Doug Parker has joined an effort with the leaders of Delta Air Lines and United Airlines to urge a crackdown by President Donald Trump on an alleged $50 billion in state subsidies to Qatar Airways and two other state-backed Middle East carriers that they argue allows the airlines to illegally compete in the US market.

Parker alluded to the controversy in a letter to employees Thursday, which adopted a skeptical tone toward Qatar’s motives.

“While anyone can purchase our shares in the open market, we aren’t particularly excited about Qatar’s outreach, and we find it puzzling given our extremely public stance on the illegal subsidies that Qatar, Emirates and Etihad have all received over the years from their governments,” Parker said.