Owned Qatar Airways seeks 10 percent stake in American
- Author: Eleanor Harrison Jun 25, 2017,
Jun 25, 2017, 1:11
"Qatar Airways indicated that it has an interest in acquiring approximately a ten percent stake", American Airlines said in a statement on Thursday, adding that Qatar wanted to buy at least $808 million of the company's stock. 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 recently received an unsolicited offer from the Middle Eastern carrier that it intends to purchase at least $808 million in the US airline.
While some had speculated that Qatar may want to invest in an attempt to soften American resistance to the expansion of foreign airlines in the U.S., Parker dismissed the idea that such a move would be effective.
American, in its filing, noted potential obstacles to Qatar's plan to acquire the stake.
The U.S. airlines accuse Qatar, Emirates and Etihad Airways of receiving massive subsidies from the governments that own them, in violation of so-called open-skies aviation treaties. American's board has not received any written request in this regard.
"We aren't particularly excited about Qatar's outreach", CEO Doug Parker said in a memo to employees. Qatar Airways will not exceed 4.75 percent without prior consent of the American Airlines board.
"Qatar Airways has long considered American Airlines to be a good oneworld Alliance partner and looks forward to continuing this relationship".
The CEOs met earlier this month during an airline-industry event in Mexico, according to an American spokesman.
Shares of American shot up 5.2 percent in pre-market trading to $50.90. The firm owned 26,095 shares of the airline's stock after selling 1,479 shares during the period.
The Middle Eastern airline has issued a statement saying it sees the U.S. airline as a "strong investment opportunity". US laws limit foreign ownership to 24.9 percent.
Akbar al-Baker, the airline's outspoken chief executive, used the occasion to blast Qatar's regional rivals.
The chilly response to Qatar's overture contrasted sharply with the celebratory reaction a year ago after US financier Warren Buffett - a longtime critic of investing in airlines - bought big stakes in American, Delta, United and Southwest.
USA airlines and their labor unions were unable to get the Obama administration to accept their accusations that the Middle East airlines receive illegal subsidies.
One of the world's fastest-growing airlines, Qatar Airways was named as "Airline of the Year" by the prestigious 2017 Skytrax World Airline Awards, held at the Paris Air Show on Tuesday, the fourth time that the national carrier has been given this global recognition as the world's best airline.
Shell Asset Management Co. maintained its stake in American Airlines Group, Inc.