Qatar Airways seeks stake in American in ‘puzzling’ move
British Airways applies to use Qatar planes
DALLAS, June 24, (Agencies): Qatar Airways wants to buy 10 percent of American Airlines, a move cloaked so heavily in international trade and politics that American’s CEO finds it puzzling.
American has tried to convince two successive US administrations that Qatar and two other state-owned Middle Eastern carriers get illegal subsidies from their governments. Qatar has fought back in the increasingly nasty dispute. Now Qatar is suffering because its nation is under blockade by its Arab neighbors, who have closed their airspace to the carrier.
On Thursday, Qatar said it plans to buy an initial stake of up to 4.75 percent American’s stock. American said Qatar CEO Akbar Al Baker told American CEO Doug Parker that he wants to acquire about 10 percent of the airline’s stock, which would cost about $2.4 billion. The two men met secretly in early June at an airline-industry conference in the Mexican resort town of Cancun.
Airlines
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.
“We aren’t particularly excited about Qatar’s outreach,” the CEO wrote in a memo to American employees. 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.
“If anything, this development strengthens our resolve to ensure the US government enforces its trade agreements regarding fair competition with Gulf carriers,” Parker said. Earlier this month he called competition from the state-owned Persian Gulf carriers the biggest threat he has ever seen to US aviation.
The chilly response to Qatar’s overture contrasted sharply with the celebratory reaction last year after US financier Warren Buffett — a longtime critic of investing in airlines — bought big stakes in American, Delta, United and Southwest. Buffett’s Berkshire Hathaway Inc. is now American’s third-biggest shareholder, at 10 percent.
Al Baker is known for brash moves and declarations. His fastgrowing company has bought its way into other airlines, including the parent of British Airways, a close partner of American. Still, the timing of the announcement about his interest American caught everyone off guard, and not just because of the trade fight.
Squeezed
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. Saudi Arabia, the United Arab Emirates, Egypt and Bahrain have barred Qatar Airways flights and forced the Dohabased carrier to alter other flight paths to avoid flying over hostile territory.
President Donald Trump has accused Qatar, home to a massive and strategic US military base, of funding terrorism. This Embassy of Kuwait in Tanzania, led by Ambassador Jassem Al-Najem, recently organized an initiative titled “Healthcare for Women and Children” in Tanzania. The event was held under the patronage of the Vice President of Tanzania Her Excellency Samia Suluhu Hassan and in the presence of the Governor of Dar AlSalam Paul Makunda. Vice President Hassan affirmed that Kuwait and its charitable organizations have been
week, however, the State Department asked Saudi Arabia and other Arab countries to detail their complaints about the small Persian Gulf monarchy and urged a speedy end to the diplomatic crisis.
A tie-up with American Airlines Group Inc. could help Qatar Airways — Qatar’s most recognized global brand — gain influence with both Wall Street and decision-makers in Washington.
American, Delta, United and their labor unions were unable to get the Obama administration to accept their accusations that the Middle East airlines receive illegal subsidies. They are now 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
consistently supporting humanitarian and relief efforts in Tanzania. This was exemplified in a recent distribution of 200 baskets of medical necessities to the maternity departments at Zakiem Hospital and Round Table Hospital. She expressed gratitude and appreciation to Kuwait and its citizens, as well as all charitable organizations and societies for the aid offered to various sectors, especially the health sector of Tanzania.
American stop talking about the effect of the Middle East airlines,” said Henry Harteveldt, a travel-industry analyst.
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.
Meanwhile, British Airways has applied to use Qatar Airways planes and crew to help the airline to fly all passengers to their destinations during
planned strikes by some of its cabin staff next month.
British Airways’ mixed fleet cabin crew — those who work on both long and short-haul flights — are set to go on strike for two weeks from July 1 over sanctions on union members involved in previous industrial action in a long-running dispute about pay.
A document dated June 21 showed that the airline had applied to Britain’s Civil Aviation Authority to use nine Qatar registered Airbus A320 or A321s between July 1 and July 16.
“The application has been made on the grounds that the lease is justified on the basis of exceptional needs ... to enable British Airways to continue passenger operations in light of planned operational disruption by its mixed fleet cabin crew,” a CAA document said.
A “wet-leasing” deal would mean that BA pays Qatar to use its aircraft and crew for the two week period.