American Airlines has received a notice that Qatar Airways plans to acquire a 10% stake in the US legacy carrier, in what appears to be an unsought investment.
The US carrier received an "unsolicited notice" that Qatar plans to buy at least $808 million worth of shares in the company on US public markets, American says in an investor filing today.
American stock, which is listed on the Nasdaq, opened at $48.33 per share today before the filing was released. Based on this price and the 493 million public shares as of 21 April, Qatar would need to invest roughly $2.38 billion for a 10% stake in the US airline.
"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," says American in the filing.
American's board must approve any investments that involve more than 4.75% of the carrier's outstanding shares.
"Qatar Airways sees a strong investment opportunity in American Airlines," the Doha-based carrier says in a statement. "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."
Qatar's pursuit of American is the Doha-based carrier's latest move to buy shares in its Oneworld partners. Last year, it raised its stake in British Airways-parent International Airlines Group to 20%. Qatar had started off with a 10% share in IAG, purchased at roughly £1.1 billion ($1.6 billion at the time) in 2015.
Qatar also closed on the purchase of a 10% share in LATAM Airlines Group in late 2016, investing $613 million in the Santiago-based carrier.
The news comes as American, along with Delta Air Lines and United Airlines, continue to push the US government to open a dialogue with the Qatari and United Arab Emirates governments over open skies. They claim that the two Middle Eastern governments have provided more than $40 billion in subsidies to their airlines, including Qatar Airways, allowing them to essentially dump capacity in the US market.
"[The proposed investment] 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," says American in the filing.
American and Qatar have limited codeshare and interline agreements, through their membership in Oneworld.
Updated with statement from Qatar Airways
Source: Cirium Dashboard