Qatar Airways wants to acquire 10% of American Airlines.
Qatar Places Unsolicited Bid To Buy 10% Of American Airlines
Qatar Airways’ unsolicited approach to purchase American Airlines was published in a regulatory filing in which Qatar Airways proposed to buy at least $808m of the US carrier’s shares.
In turn, American Airlines has said it would respond when appropriate.
American Airlines, which is the largest in the world, saw its shares rise by 5% but fell down to 1.1% by the close of trading.
According to Qatar Airways, American is a worthwhile investment opportunity and it was not looking to get itself in the day to day governance, operations and management of the airline.
Qatar Airways believes in the fundamentals of American Airlines, said the firm in a statement.
In 2015, Qatar Airways bought out 10% in International Airlines Group (IAG), which owns Iberia and British Airways.
In July, it increased the stakes to 20%.
However, Qatar Airways has been experiencing challenges recently. Earlier this month, Libya, United Arab Emirates, Bahrain, Egypt and Saudi Arabia severed diplomatic ties with Qatar.
Egypt, Bahrain and the UAE all said they would halt flights coming in and out of Qatar and would shut off their airspace to Qatar Airways.
US firms, including American Airlines, have also applied pressure on the White House to take action against Gulf airlines including Qatar Airways, which are seen to receive unfair government subsidies.
According to Seth Kaplan, the Airline Weekly managing partner, Qatar Airways is looking to invest in American Airlines to minimize these objections against the Gulf carrier.
The carrier may also be keen on strengthening the relationship between the US and Qatar, which has become unstable following the diplomatic fall out in the Gulf.
Mr. Kaplan said, “It is certainly not just a financial investment.”
Qatar Airways and American Airlines are already in business together through the Oneworld alliance. Mr. Kaplan said this recent investment could strengthen the bond between these two companies but will not have a significant effect on consumers.
He said it was still unclear how American Airlines will respond.
In a statement, Qatar Airways said it was not looking to acquire over 4.75 percent of shares without first obtaining a go ahead from the American Airlines board.
Recently, Qatar Airways acquired a 10% stake in IAG.
IAG chief executive, Willie Walsh said he was excited about the long term and supportive investment that Qatar Airways has extended.