Qatar Airways seeks up to 10% stake in American Airlines

Marco Green
June 26, 2017

"American Airlines continues to believe that the President and his administration will stand up to foreign governments to end massive carrier subsidies that threaten the USA aviation industry and that threaten American jobs", it said in a filing.

"The notice advised that Qatar Airways intends to purchase at least $808 million and, in a conversation between the CEOs of the two companies..."

American, along with Delta and United Airlines, has repeatedly accused state-owned Qatar Airways and its big regional rivals - Emirates and Etihad of the United Arab Emirates - of enjoying massive government subsidies that have helped them become leading global players.

The announcement comes months after Warren Buffett's Berkshire Hathaway (BRKB) has built up stakes in the top US airlines. Recently, seven neighboring countries, including Saudi Arabia and the United Arab Emirates, cut diplomatic ties with the Gulf State of Qatar, which effectively banned Qatar Airways flights and Qatari-registered aircraft from entering their airspace. American's articles of incorporation also prohibit a single owner from holding more than 4.75% of the outstanding shares without the board's prior approval. It said it had received no request from Qatar for such approval. Foreign ownership laws also limit a foreign voting interest to 24.9pc, the Fort Worth, Texas-based airline said.

The other carriers to make the Skytrax top 10 include (in no particular order): Singapore, Hainan, ANA, Cathay Pacific, Emirates, Etihad, Lufthansa, Garuda Indonesia, and EVA Air.

Qatar has since said it will not negotiate with its neighbors to resolve the dispute unless they first lift the trade and travel boycott.

On Thursday, Shares of American Airlines Group Inc (NASDAQ:AAL), with shares gained 1.22% is now trading at $49.01. "Qatar Airways will make all necessary regulatory filings at the appropriate time", the statement adds.

Qatar Airways wants to buy 10 percent of American Airlines, a move cloaked so heavily in worldwide trade and politics that American's CEO finds it "puzzling".

Qatar Airways, however, said it sees a "strong investment opportunity" in American and plans to be only a passive investor with no role in management or operations.

American said in a regulatory filing it did not solicit the investment and that such an action would not change the composition of the company's board, governance, management or strategic direction.

Other reports by Click Lancashire

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