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Qatar Airways drops plans to purchase stake in American Airlines

In what can only be described as yet another sign of the deepening dispute between the United States and the Gulf-based carriers, Qatar Airways has announced that it would no longer pursue an ownership stake in American Airlines.

Earlier, American had notified both Qatar Airways and Etihad Airways of Abu Dhabi that it would stop its codesharing agreements with them.

Back in June, Qatar Airways notified American Airlines of its desire to acquire a 10% stake in the publicly traded U.S. carrier, an investment that American Airlines resisted. With the latest aforementioned announcement, the Gulf carrier said it has dropped the proposal.

“Qatar Airways has taken the decision not to proceed with its proposed passive financial investment in American Airlines”, the carrier said in a statement. “Further review of the proposed financial investment, taking into account the latest public disclosure of American Airlines, has demonstrated that the investment no longer meets our objectives.”

The Doha-based carrier said it would continue to investigate “alternative investment opportunities” in the U.S. and elsewhere.

Since 2015, American, Delta and United airlines have waged a lobbying war against, Qatar, Etihad and Emirates airlines, accusing the latter state-owned carriers of benefiting from $50 billion in government subsidies since 2004 in violation of Open Skies trade agreements. In July, seven U.S. senators penned a letter to Secretary of State Rex Tillerson and Transportation Secretary Elaine Chao, urging the Trump administration to apply those agreements with Qatar and UAE.

The Partnership for Open & Fair Skies, the lobbying organization that represents the U.S. carriers, the Air Line Pilots Association and other labor groups claim that 285 members of Congress to date have expressed their displeasure against the alleged trade violations.

American Airlines referred to the dispute over Open Skies agreements in its decision to stop codeshare agreements with Qatar Airways and Etihad Airways. The Fort Worth, Texas-based carrier was diplomatic in addressing Qatar Airways’ latest move.

“We respect Qatar Airways’ decision not to proceed with its proposed investment in American Airlines”, the carrier said in a statement. “This in no way changes the course for American. Our 120,000 team members remain energized and focused on taking care of those who entrust us with their travel needs.”

In a Securities and Exchange Commission filing that it made in shortly after receiving notification of Qatar Airways’ interest in obtaining shares, American Airlines did raise the issue of the Open Skies dispute.

“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”, the carrier said in the filing. “It also does not alter American Airlines’ conviction on the need to enforce the Open Skies agreements with the United Arab Emirates and the nation of Qatar and ensure fair competition with Gulf carriers, including Qatar Airways. American Airlines continues to believe that the President and his administration will stand up to foreign governments to end massive carrier subsidies that threaten the U.S. aviation industry and that threaten American jobs.”

 

http://www.ainonline.com/aviation-news/air-transport/2017-08-02/qatar-airways-drops-proposal-buy-stake-american-airlines

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