Qatar Eyes 10 Percent Stake in American Airlines
- Author: Zachary Reyes Jun 25, 2017,
Jun 25, 2017, 1:11
American, based in Fort Worth, Texas, said in its regulatory filing that Qatar's proposed investment wouldn't change its board makeup, governance, management or strategic direction.
American and other airlines, including Delta and United, have accused state-run Qatar Airways - along with United Arab Emirates airlines Emirates and Etihad - of getting unfair financial backing from their respective governments.
Qatar Airways is attempting to buy a 10 percent stake in American Airlines, triggering USA antitrust oversight over deals of such size.
"Qatar Airways plans to make an initial investment of up to 4.75%".
American said its certificate of incorporation prohibits anyone from acquiring 4.75% or more of the company's outstanding stock without advance approval from the board following a written request.
But Parker said American would not be "discouraged or dissuaded from our full-court press in Washington, D.C., to stand up to companies that are illegally subsidized by their governments".
Parker alluded to the controversy in a letter to employees Thursday, which adopted a skeptical tone toward Qatar's motives.
Qatar went on to say that it has "long considered American Airlines to be a good Oneworld Alliance partner and looks forward to continuing this relationship".
The two airlines have had their differences in recent months.
Qatar Airways wants to buy 10 percent of American Airlines, a move cloaked so heavily in global trade and politics that American's CEO finds it "puzzling".
In other American Airlines Group news, VP Derek J. Kerr sold 104,223 shares of American Airlines Group stock in a transaction that occurred on Friday, June 2nd.
"If anything, this development strengthens our resolve to ensure the United States government enforces its trade agreements regarding fair competition with Gulf carriers, because we must make it crystal clear that no minority investment in American will ever dissuade us from doing what is right for our team members, our customers and all of our shareholders".
President Donald Trump has accused Qatar, home to a massive and strategic USA military base, of funding terrorism.
Per the US' foreign ownership laws, Qatar Airways would ultimately be capped at owning 24.9% of any airline in the country.
In a letter to staff, American chief executive Doug Parker described the Qatar plan as puzzling at best and concerning at worst.
On Tuesday, Qatar Airways was named the world's best airline by Skytrax, unseating Emirates, which won the honor past year.
Also, the three Middle East airlines are cutting into lucrative routes overseas for USA airlines. And in December it announced a 10 percent stake in Chile's LATAM Airlines Group, acquired for $608 million.