WOW: Qatar Airways Taking Major Stake in American Airlines

oneworld airline Qatar Airways, currently under geopolitical seige from Saudi Arabia, the UAE and others in the Mideast, is the largest shareholder in British Airways parent IAG.

It’s also set to become the 7th largest shareholder in American Airlines — with possible plans to become the largest alongside T. Rowe Price and PRIMECAP Management Company.

Qatar Airways has filed under the Hart-Scott-Rodino Act to acquire a portion of American Airlines stock. We know that so far their initial acquisition will be approximating $808 million worth of stock, or about 3.5% of the company based on its current market cap. That would place them ahead of BlackRock among the airline’s major owners:

However American Airlines is reporting that Qatar Airways CEO Akbar al-Baker and American Airlines CEO Doug Parker have discussed Qatar acquiring a 10% stake in the airline.

In an SEC 8-K filing American discloses these discussions and re-iterates its protectionist stance that even if it’s partly owned by its oneworld partner Qatar it still thinks that the US government should limit consumer choice by cracking down on flights to the US by Emirates, Etihad, and Qatar and enforce higher fares.

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 U.S. aviation industry and that threaten American jobs.

I love that American Airlines promises to continue to seek government protection from Qatar even if they’re owned in part by Qatar, and to claim that their shareholders are being hurt by Qatar even as Qatar drives up their share price.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Pingbacks

  1. […] Qatar Doubles Down on American  –  VFTW broke the news this morning that Qatar Airways is taking a 3.5% ownership stake, and possibly as much as 10%, in American Airlines. Qatar Airways is already the lead stakeholder for British Airways. I’m also curious to see how this changes the view on Middle Eastern competition with the Big 3 and the White House.  (View From the Wing) […]

Comments

  1. Fascinating. While these plans must have pre-dated the recent isolation of Qatar by Saudi Arabia, the UAE, etc., I still wonder about the international relations implications of the airline buying a major stake in American.

  2. Beat the WSJ (with all their resources) by 18 minutes!

    From: WSJ.com Editors [mailto:access@interactive.wsj.com]
    Sent: Thursday, June 22, 2017 8:48 AM
    To:
    Subject: WSJ NEWS ALERT: Qatar Airways Seeking as Much as 10% Stake in American Airlines

  3. @don – I can’t agree more. AA is in trouble and only some kind of fairytale infusion of cash will help them make even small changes.

    I don’t fly loyal to only one airline anymore. The airlines are feverishly pushing loyal customers out the door. Now things like operational performance, flight schedules, and quality customer service find my business.

  4. @Thomas – please explain what you think is incorrect in this post? (By the way I love the ‘yousuck’ in your fake email address)

    By the way I’m actually not sold that Qatar does a 10% stake, since it’s always wise to be skeptical of anything coming out of Akbar al-Baker.

  5. Given QR cannot own a share more than 10% your own table shows two groups with slightly more than 10% and thus would remain the largest single and major shareholders. The other difference between other shareholders and QR, aside from being a foreign owner, it’s also a sovereign entity, that is it’s owned by a foreign government. Hard to see a Republican “America First” president and majority in both Houses of Congress permitting a foreign government own any part of an American airline least wise the largest airline in the US and world!

  6. Sources tell me that as part of the agreement Qatar Airways offers to degrade their service and hard product to make AA not look so awful.

  7. Some folks are confusing the words “major” and “majority”. Qatar would have a major stake in American (it would be one of the largest shareholders) but certainly not a majority stake.

  8. Hold on. Not so fast. The press is misleading ( as more often than not). Any purchase of AA stock of more than 4.75% requires FULL board of directors approval first. I do not see this happening so easily. Seeing as US airlines ( including AA ) are always crying to Federal regulators of the unfair advantage mid east airlines have, as supposedly their budgets have government funds supporting them all the time. But it is true that Al-Baker does like to have his little fingers in a lot of pies.

  9. “But it is true that Al-Baker does like to have his little fingers in a lot of pies.”

    Like all good Al-Bakers. He just wants to muscle in some more so he can buy Iberia and take over the growing market from Brazil and link it to China.

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