Qatar Airways wants to buy 10% of American Airlines
Posted June 22, 2017 10:22 a.m. EDT
Qatar Airways long been at odds with American Airlines. Now it wants to buy a big chunk of the U.S. carrier.
"Qatar Airways indicated that it has an interest in acquiring approximately a ten percent stake," American Airlines said in a statement on Thursday, adding that Qatar wanted to buy at least $808 million of the company's stock.
American, along with Delta and United Airlines, has repeatedly accused Qatar Airways and its big regional rivals -- Emirates and Etihad of the United Arab Emirates -- of enjoying massive government subsidies that have helped them become leading global players.
The U.S. carriers want President Trump's administration to review the Open Skies agreements that allow the Gulf carriers to fly freely from the United Arab Emirates and Qatar to any U.S. destination. They claim the airlines rapid expansion in the U.S. is hurting American jobs. The Gulf airlines deny those claims.
Related: Qatar Airways CEO: U.S. 'fueling' the fire of Gulf crisis
American Airlines shares climbed 3% in response to news of the unsolicited investment proposal from Qatar, which will require the approval of the U.S. company's board.
And there's no sign American Airlines is going soft on Qatar because of the approach. It said it would not change the composition of its board, management or strategic direction.
"It also does not alter American Airlines' conviction on the need to enforce the Open Skies agreements with the United Arab Emirates and the nation of Qatar and ensure fair competition with Gulf carriers," American said.
Qatar Airways did not respond to requests seeking comment.
Qatar Airways has been facing pressure back home after being blocked by its neighbors Saudi Arabia, UAE and Bahrain over a political dispute. It can no longer fly to 18 destinations in those countries, forcing it to ground about 50 flights a day. It also needs to avoid those countries' airspace, adding to fuel costs and longer flight times.
That comes after a tricky start to the year, when fallout from Trump's proposed travel ban and the U.S. electronics ban hurt business.
But there was some good news for the airline on Tuesday, when it was awarded 'Airline of the Year' by Skytrax.