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American Airlines says rival Qatar seeks to buy up to 10% stake
[NEW YORK] Qatar Airways, one of three Persian Gulf carriers that large US carriers have criticised for unfair competition, is seeking to acquire a major stake in American Airlines Group Inc.
The Doha-based carrier intends to invest at least US$808 million in American, the US carrier said Thursday in a regulatory filing. In a conversation between the chief executive officers of both companies, Qatar Air said it intended to buy about 10 per cent of American, according to the filing.
The unsolicited approach sets a new stage in a battle in which American and other major US airlines have accused Middle Eastern carriers of receiving government subsidies that give them an unfair advantage in international air travel. A 10 per cent stake would place state-owned Qatar Air among American's largest shareholders, equal to Warren Buffett's Berkshire Hathaway Inc.
American said the proposed investment doesn't alter its conviction on the need to enforce agreements with "the nation of Qatar and ensure fair competition with Gulf carriers."
The Fort Worth, Texas-based airline said it believes the US government will continue to defend against "massive carrier subsidies that threaten the US aviation industry and that threaten American jobs."
The US carrier said anyone seeking to acquire at least 4.75 per cent of the company's stock is required to receive approval from its board. The company said it hadn't received any such notice. Foreign ownership laws also limit a foreign voting interest to 24.9 per cent, the airline said.
The shares rose 5.5 per cent to US$51.10 at 9:00am in premarket trading in New York.