Qatar Airways seeks 10 pct stake in American Airlines
- Author: Zachary Reyes Jun 24, 2017,
Jun 24, 2017, 22:21
You have to hand it to Qatar Airways CEO Akbar Al Baker; he never fails to surprise. Laws on foreign ownership also limit the total percentage of foreign voting interest to 24.9%, according to American Airlines' SEC filing.
American's certificate of incorporation restricts anyone from buying 4.75 percent or more of its shares without advanced board approval following a written request.
Shares of American Airlines jumped 1.7 percent to $49.24 in mid-morning trading.
"It may just be that Qatar Airways views American Airlines as a solid financial investment", he added.
"The Big Three are earning record profits, and the US airline industry is hiring at record levels", he said.
Currently, American has three investors that own more than 10 percent of the company.
"If anything, this development strengthens our resolve to ensure the US government enforces its trade agreements regarding fair competition with Gulf carriers", Parker wrote.
Qatar Airways is getting squeezed in a dispute between its national government and neighboring countries led by Saudi Arabia, which accuse Qatar of supporting Islamic extremists.
President Donald Trump has tweeted criticism of Qatar, despite the presence of a massive and strategic US military base within its borders.
At the time of publishing they were up 3.35 per cent at $50.05.
American's board must approve any investments that involve more than 4.75% of the carrier's outstanding shares.
They also cut into lucrative routes overseas for US airlines.
The gulf carrier says it is seeking a stake as large as 10% in American, the world's largest carrier by traffic. Click to get this free reportAmerican Airlines Group, Inc.
Qatar's move reflects the broad ambitions of the carrier, which has grown from a small, regional player focused on the Middle East to a global carrier with flights to 150 destinations. "In that case, we would agree with them". The airline declined a request to interview Parker or other executives.
Qatar Airways and British Airways have a revenue sharing partnership between their respective hubs in Doha and London, and Qatar Airways plans to launch flights to LATAM's base in Santiago, Chile.
Earlier this week, Qatar Airways won the top spot from travelers in airline-analysis firm Skytrax's world airline awards, which it dubs "the Oscars of the aviation industry". The stake has since grown to 20%, making Qatar Airways the biggest shareholder in IAG.