The breakdown in relations in the Middle East hasn’t deterred Qatar Airways, as it is looking to expand its portfolio by buying a stake in American Airlines. But the attempt drew a frosty response from the US airline.Qatar Airways is willing to shell out about $808 million (724 million euros) to secure a 10 percent stake in the American Airlines Group, despite the ongoing regional crisis in the Middle East.
The surprise investment push by Qatar Airways was disclosed by American Airlines in a securities filing Thursday. But the outreach drew a frosty response from the US carrier.
“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,” said American Airlines in the filing.
American also noted potential obstacles to Qatar’s plan, as its rules prohibit “anyone from acquiring 4.75 percent or more of the company’s outstanding stock without advance approval from the board.” It said it had received no request from Qatar for such approval.
Further, American said, “there are foreign ownership laws that limit the total percentage of foreign voting interest to 24.9 percent.”
Qatar Airways said it would not exceed the 4.75 percent level without board approval and would “make all necessary regulatory filings” when required. “Qatar Airways sees a strong investment opportunity in American Airlines,” the company said in a statement.
Qatar Airways already owns substantial stakes in the parent company of British Airways and Aer Lingus.
Crisis time
The airline’s move comes as Qatar faces conflict with neighboring countries after Saudi Arabia, Bahrain, Egypt and the United Arab Emirates severed ties over Doha’s alleged support for extremist groups and Iran. The countries have suspended all flights to and from Qatar.
Qatar’s government denies all the allegations.
Read: Gulf crisis: Qatar’s neighbors issue ultimatum, call for Al-Jazeera shutdown
Qatar Airways has downplayed the impact of the dispute on its business, saying on June 14 that the “vast majority” of its network was unaffected. But analysts have warned the profitable carrier could take a hit should the diplomatic crisis drag out.
Akbar Al Baker, the CEO of Qatar’s national airline, warned of a lasting wound in the region at the Paris Air Show and called on the United States to act as a mediator in the diplomatic tussle.
American also has had its differences with Qatar Airways, among other Middle Eastern carriers, over state subsidies the US air travel industry says violate international agreements.
rd/sri (AFP, Reuters)
