Qatar Air­ways ends bid for ri­val

Los Angeles Times - - BUSINESS BEAT - As­so­ci­ated press

Qatar Air­ways says it is drop­ping an at­tempt to buy a big stake in Amer­i­can Air­lines, an au­da­cious bid that had re­ceived a chilly re­cep­tion from Amer­i­can.

Qatar Air­ways said Wed­nes­day that the in­vest­ment no longer meets its ob­jec­tives.

Amer­i­can Air­lines said it re­spected Qatar’s de­ci­sion to with­draw, and added that the turn­about would not make any dif­fer­ence in Amer­i­can’s plans.

Qatar said in June that it planned to buy an ini­tial stake of up to 4.75% of Amer­i­can’s stock, but Fort Worth­based Amer­i­can said Qatar’s goal was a 10% stake.

It was an odd move. The two air­lines are on op­po­site sides of a nasty fight that has big U.S. car­ri­ers com­plain­ing that they are un­fairly un­der­cut on fares be­cause, they say, Qatar and two other fast-grow­ing Mid­dle East air­lines get il­le­gal sub­si­dies from their gov­ern­ments.

Qatar Air­ways had said it wanted to be a pas­sive in­vestor and not take an ac­tive role in set­ting strat­egy at Amer­i­can, the world’s big­gest air­line. But on Wed­nes­day, Qatar said it changed its mind af­ter a re­view of the deal’s fi­nances and Amer­i­can’s re­ac­tion.

Amer­i­can Chief Ex­ec­u­tive Doug Parker had given a chilly pub­lic re­sponse to the over­ture, call­ing it puz­zling and not par­tic­u­larly ex­cit­ing. Parker said Qatar CEO Ak­bar Al Baker ap­proached him about an in­vest­ment dur­ing a se­cret meet­ing at an air­line-in­dus­try con­fer­ence in Mex­ico.

Parker vowed that de­spite the prospect of Qatar be­com­ing a large share­holder, Amer­i­can would con­tinue to fight Qatar, Emi­rates and Eti­had Air­ways over the al­le­ga­tions of un­fair gov­ern­ment sub­si­dies. The Mid­dle Eastern air­lines deny get­ting il­le­gal sub­si­dies.

In July, Amer­i­can ratch­eted up the ten­sion by an­nounc­ing that it was drop­ping seat-sell­ing part­ner­ships with Qatar and Eti­had be­cause of the sub­si­dies dis­pute.

Qatar said it would con­tinue to look for op­por­tu­ni­ties to in­vest in air­lines around the world to de­velop “the best pos­si­ble travel ex­pe­ri­ence for its cus­tomers.”

Shares of Amer­i­can Air­lines Group Inc. fell 61 cents, or 1.2%, to $50.45 on Wed­nes­day.

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