qatar’s offer to buy 10 percent of american airlines makes no sense
Last Updated : GMT 06:49:16
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Last Updated : GMT 06:49:16
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Describing it as confusing

Qatar’s offer to buy 10 percent of American airlines makes no sense

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Arab Today, arab today Qatar’s offer to buy 10 percent of American airlines makes no sense

American Airlines Chairman and CEO, Doug Parker
Washington - Arab Today

An offer by Qatar Airways to buy 10 percent of American Airlines has been dismissed by the US carrier’s CEO as “confusing” and “ill-conceived.” "It makes no sense. Why an airline we are aggressively fighting would want to take a stake makes no sense,” American Airlines Chairman and CEO, Doug Parker said in an interview with CNBC.
Parker said Qatar CEO Akbar Al-Baker has offered to buy about 10 percent of the airline's stock, which would cost about $2.4 billion. On Thursday, Qatar confirmed the offer and that it plans acquire an initial stake of up to 4.75 percent American's stock.
Al-Baker made the offer early this month at an airline-industry conference in the Mexican resort town of Cancun. Although the two airlines are on opposite sides of a trade fight, they sell seats on each other's flights and cooperate as members of the same alliance of global carriers.
Qatar said in a statement that it hopes to continue that relationship. It said it sees a "strong investment opportunity" in American, and would be merely a passive investor with no role in American's management or operations.
American, the world's biggest airline, said Qatar's bid was unsolicited, and Parker belittled it. In a memo to American employees, Parker said,"We aren't particularly excited about Qatar's outreach.” He said the move was "puzzling" given American's ongoing fight over claims that Qatar, Emirates and Etihad Airways receive unfair government subsidies — a fight he vowed to keep pursuing.
American, Delta, United are pressing their case with the Trump administration, leading some to suspect a political motive behind Qatar's interest in becoming an American Airlines stockholder. "Part of this is an attempt to squelch American's voice as part of that fair and open skies group and to have American stop talking about the effect of the Middle East airlines," said Henry Harteveldt, a travel-industry analyst.
Parker said that if that is Qatar’s motivation, “it is misguided and ill conceived," said Parker. "All this is doing is strengthening our resolve to defend our airline, which we will continue doing vigorously." Hunter Keay, an airline analyst for Wolfe Research, was quoted by CNBC as saying the buy-in is not likely to happen. "All else equal, we see a remote chance of this going forward,” Keay wrote in a note sent to clients.
American's unions, who fear job losses if Middle East carriers expand service to the US, reacted with apprehension. Dennis Tajer, a spokesman for the Allied Pilots Association, accused Qatar of "asymmetric financial warfare."
"This is an adversary of ours, and suddenly it has come to the front door with cash that it got from its rich uncle, the country that runs them, and says 'We're here to buy some property,'" Tajer said. Qatar has been on a global buying spree of late, mirroring a strategy followed by a smaller Gulf rival, Abu Dhabi-based Etihad Airways.
Last year, Qatar set up a revenue-sharing partnership with British Airways parent International Airlines Group. It owns just over 20 percent of IAG, which also controls European carriers Aer Lingus, Iberia and Vueling. Qatar also announced it would take a 49 percent stake in Meridiana, Italy's second-biggest carrier, and it bought 10 percent of Chile's Latam Airlines Group for $608 million.

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