Qatar Airways publicly abandoned a plan today which was announced In late June that the company would seek to take 10% stake in American Airlines and intended to increase its ownership to 4.75%.
Qatar Airways already owns 20% of IAG (the parent of British Airways, Iberia, Aer Lingus and Vueling) but said today in their brief statement that buying a stake “no longer meets our objectives,”.
Since the announcement of this plan there were a couple of further run-ins apart from the usual feud between the North American and the ME3 carriers. Qatar Airways CEO publicly called U.S. carriers “crap” and ridiculed their flight attendants as being grandmothers citing a very young cabin crew average for the Doha based carrier itself.
Bloomberg (see here) now reported that the deal is officially off and Qatar won’t pursue either a higher ownership or seek to buy a larger 10% stake in the Dallas based company.
Qatar Airways Ltd. dropped a plan to invest in American Airlines Group Inc. following a chilly reception from the U.S. carrier.
Buying a stake “no longer meets our objectives,” Qatar Air said in an emailed statement Wednesday, alluding to the “latest public disclosure” by American without elaborating. The U.S. carrier reported financial results July 28, capping an earnings season in which rising concerns about airlines’ pricing power dragged industry stocks to their worst month in a year.
The decision by Qatar Air marks a victory for American Chief Executive Officer Doug Parker, who called the proposed stake purchase “puzzling at best and concerning at worst.’’ …
The Middle Eastern carrier, led by CEO Akbar Al Baker, said it would “continue to investigate alternative investment opportunities in the United States of America and elsewhere that do meet our objectives.”
American first disclosed Qatar’s interest in buying a stake in a June 22 regulatory filing, and later confirmed Al Baker had approached Parker during an international industry conference in Cancun, Mexico, earlier in the month.
“While anyone can purchase our shares in the open market, we aren’t particularly excited about Qatar’s outreach,” Parker told employees in a letter June 22.
It’s no secret that the carriers didn’t have a loving relationship with each other. American has also become more aggressive in canceling codeshare agreements with their Middle East partners Qatar Airways and Etihad Airways.
The U.S. carriers are accusing their ME3 rivals to stay afloat with massive state subsidies that allow them to undercut market rates for tickets and offer a better product overall that they can’t compete with.
I don’t think that on the financial side Qatar Airways all of a sudden realized there was an element to that investment that wasn’t worth the trouble going through with the deal.
Sounds more like they were stirring the pot a little bit to make the U.S. carriers more nervous than they already were. It’s well known that CEO Akbar al Baker isn’t a guy known for his diplomatic skills but rather his outspoken nature.