Qatar Airways set to move on a 10% stake in American Airlines

Qatar Airways could be set to invest more than $800m in a 10% stake in American, an airline that has accused the Middle Eastern carrier of benefitting from state handouts.
In a stock exchange filing, the US carrier said it had received an “unsolicited notice” from Qatar Airways of its intention to make a significant investment in the company.
“The notice advised that Qatar Airways intends to purchase at least $808m and, in a conversation between the chief executive of the two companies initiated by the Qatar Airways chief executive, Qatar Airways indicated that it has an interest in acquiring approximately a ten percent stake,” the notice said.
Qatar Airways also issued a statement saying it planned to initially invest in a 4.75% stake in the firm.
"Qatar Airways sees a strong investment opportunity in American Airlines. 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," the Middle Eastern carrier said.
"Qatar Airways has long considered American Airlines to be a good oneworld Alliance partner and looks forward to continuing this relationship. Qatar Airways plans to make an initial investment of up to 4.75%. Qatar Airways will not exceed 4.75% without prior consent of the American Airlines board. Qatar Airways will make all necessary regulatory filings at the appropriate time."
An investment by Qatar Airways of more than $81m needs to be filed under the HSR Act, which Qatar has done, and will be subjected to a review by the antitrust division of the US Department of Justice. Any investment in more than 4.75% of the airline’s shares would also require the approval of American’s board.
“The company also notes that there are foreign ownership laws that limit the total percentage of foreign voting interest to 24.9%,” American said in the stock announcement.
“The proposed investment by Qatar Airways was not solicited by American Airlines and would in no way change the company’s Board composition, governance, management or strategic direction.
“It also does not alter American Airlines’ conviction on the need to enforce the Open Skies agreements with the United Arab Emirates and the nation of Qatar and ensure fair competition with Gulf carriers, including Qatar Airways.
“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 US aviation industry and that threaten American jobs.”
The big three US carriers – American, United and Delta – have accused Middle Eastern airlines of receiving $40bn in unfair subsidies.
Meanwhile, Qatar is also embroiled in a row with its Middle Eastern neighbours that has seen Saudi Arabia, the United Arab Emirates, Bahrain and Egypt close its airspace to Qatar Airways as they accuse the country of destabilising the region – something it denies.
Qatar Airways Group chief executive Akbar Al Baker has called on the International Civil Aviation Organization (ICAO) to lift what it describes as the illegal airspace ban and at the Paris Air Show said it was considering legal action to claw back additional operating costs as a result of the move.

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