Qatar Airways says it intends to buy 10% stake in American Airlines

Qatar Airways has expressed interest in buying up to 10 percent of American Airlines, an unsolicited approach that comes amid criticism from U.S. carriers that Persian Gulf competitors have an unfair advantage.

The state-owned Qatar Airways said it intended to buy the American carrier’s stock on the open market, according to a Securities and Exchange Commission filing. The Qatar Airways chief executive, Akbar al-Baker, approached the American Airlines chief, Doug Parker, about the possible purchase.

Qatar’s move reflects the broad ambitions of the airline, which has grown from a small, regional player focused on the Middle East to a global carrier with flights to 150 destinations. The airline has plans to bolster its presence in the United States, where it already flies to 10 cities.

But the airline’s expansion has set off a bitter fight with rivals in the United States. American, along with other major domestic players, has accused Qatar and other Persian Gulf airlines of violating air treaties, called Open Skies agreements, by fueling their growth with huge subsidies from their government backers.

The timing of the Qatar Airways approach also adds a complication to the U.S. government’s increasingly troubled relationship with Qatar, the tiny but wealthy Persian Gulf Arab emirate that borders Saudi Arabia and is home to the largest U.S. military air base in the Middle East. Qatar is in the midst of a crisis provoked by Saudi Arabia, which cut ties with the country a few weeks ago and imposed an economic embargo over what the Saudis called Qatar’s support for terrorism.

American said in the securities filing that the proposed transaction “does not alter” its conviction that the federal government must enforce its Open Skies deal with the Qatari government to “ensure fair competition.” Matt Miller, a spokesman at American Airlines, declined to comment beyond the securities filing.

The gulf carrier described the potential purchase as a “strong investment opportunity” and

promised not to involve itself in operations. “Qatar Airways believes in American Airlines’ fundamentals and intends to build a passive position in the company with no involvement in management, operations or governance,” the statement said.

Qatar Airways said it planned to initially buy 4.75 percent on the public market, a stake worth about $1.2 billion based on American’s current share price. A Department of Justice review of the investment will begin once the carrier acquires about $81 million of American’s stock.

To buy more, the gulf carrier will need the approval of the American Airlines board. Any move could set up a standoff at a time when Qatar Airways is already under pressure.

Several U.S. carriers, including American Airlines, have complained to the Trump administration about the subsidies that the Persian Gulf airlines receive from their government backers. The money, the U.S. companies wrote in a letter to Secretary of State Rex W. Tillerson, has allowed such companies “to operate without concern for turning a profit” and “therefore focus entirely on stripping market share and driving out competition.”

The U.S. companies are playing to President Donald Trump’s “America first” agenda, saying the subsidies hurt the country’s job market. “For every longhaul route lost or foregone as a result of subsidized gulf carrier competition, more than 1,500 American jobs are lost,” the letter in February said.

Qatar Airways has also been ensnared in an international dispute, after Saudi Arabia and four other Arab states recently cut diplomatic ties with Qatar. Trump added further fuel to the crisis by emphatically siding with the Saudis on Twitter — even as his own diplomats appeared to disagree.

The embargo on Qatar has severely affected Qatar Airways, one of the country’s most recognized global brands. The airline can no longer fly to Bahrain, Egypt, Saudi Arabia or the United Arab Emirates.