Qatar Airways dumps plan for American Airline stake

03 / 08 / 2017

Qatar Airways has dropped a plan to acquire up to a 10% stake in American Airlines, according to press reports. In a statement, the Middle Eastern carrier said that “taking into account the latest public disclosure of American Airlines”, the investment “no longer meets our objectives”.

The US carrier had vociferously opposed Qatar’s intentions, announced in late June, to build up a significant stake in American. The carrier has been one of the leading protagonists in a campaign against what it sees as unfair public subsidies paid to Qatar, as well as to other Middle Eastern carriers such as Etihad and Emirates.

American openly opposed Qatar’s plan to invest up to $800m in a 10% stake, pointing out that its board could veto any investment of more than 4.75% of its shares. It also cancelled a code-share agreement.

The Middle Eastern carrier’s motivations for wanting to buy into the US airline are unclear. Publicly, it said that it saw a slice of American as a good investment. However, some analysts saw it as an attempt to try and defuse the campaign by American Airlines and other major US carriers against its alleged state funding.

Qatar’s recent troubles with its neighbours - Saudi Arabia, the United Arab Emirates, Bahrain and Egypt have imposed a trade and air embargo over Qatar’s alleged support for extremist groups – may also have been a factor in the airline’s decision to draw in its horns. The embargo has forced Qatar Airways to cancel regional flights and ground some of its aircraft.