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Asia Today ISSN 1861-4604 Wednesday, October 17, 2018

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Qatar Airways expresses interest in buying 10 percent stake in American Airlines

10 percent of public shares

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CALIFORNIA, U.S. - In a regulatory filing, American Airlines said that it had received an unsolicited notice from the Gulf country's state-owned airline, Qatar Airways expressing its intention to make a "significant investment."> BNN
According to the filing, CEOs of both the companies had held a discussion and Qatar Airways said it wanted to buy about 10 percent of public shares.
American Airlines said that Qatar Airways filed under the Hart-Scott-Rodino Act, as required for its proposed investment of at least $808 million. 
American Airlines added in a statement, “The proposed investment by Qatar Airways was not solicited by American Airlines and would in no way change the company's board composition, governance, management or strategic direction.”
It further added that it remained committed to pursuing fair competition with airlines based in Gulf nations. 
Qatar Airways said in a statement that it sees a "strong investment opportunity" in American and that it "intends to build a passive position in the company with no involvement in management, operations or governance."
It said, “Qatar Airways plans to make an initial investment of up to 4.75 percent. Qatar Airways will not exceed 4.75 percent without prior consent of the American Airlines board. Qatar Airways will make all necessary regulatory filings at the appropriate time."
Concerns about subsidies that Qatar Airways, Etihad Airways, and Emirates receive from their home countries - that create unfair competition - have been high among U.S. airlines.
They believe this could squeeze them out of key markets.
Earlier this month, Saudi Arabia and other Middle Eastern neighbours cut diplomatic ties with Qatar, accusing it of supporting terrorism and the countries have since closed their airspace to Qatar Airways.
In April, the airline said that it had seen a drop in bookings because of the electronic ban imposed by the U.S. and U.K. governments.
Investors cheered reports of Qatar's potential investment in American, sending shares of the U.S. carrier up more than five percent in pre-market trading. 
American shares were up about 2 percent in regular morning trade.
Qatar Airways, which is the Middle East's second-biggest airline, also owns 20 percent of British Airways-owner International Airlines Group (IAG) and 10 percent of South America's LATAM

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