Qatar pulls out of American

Qatar pulls out of American

Qatar Airways just can’t keep out of the headlines. After revealing its intention to purchase up to 10% of American Airlines stock, it has decided to drop out of the $808 million deal.

The Gulf airline released a statement today saying: “Qatar Airways has taken the decision not to proceed with its proposed passive financial investment in American Airlines.”

The statement followed American Airlines’ second-quarter results. American reported slight downturns in pre-tax margin, which dropped from 14.4% last year to 11.6%, and net income, down from $950 million to $803 million.

Qatar says in its 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.”

American was opposed to the deal from the beginnning. CEO Doug Parker released a statement soon after the original letter of intent was sent in June, saying: “We will not be discouraged or dissuaded from our full court press in Washington, DC., to stand up to companies that are illegally subsidized by their governments.”

The American carrier has been actively campaigning against Qatar Airways for the last few years. It is a key member of the Partnership for Open and Fair Skies, a coalition that opposes the “unfair” government subsidies that Qatar Airways, Etihad and Emirates receive.

Qatar is desperate for allies right now, but investing in American Airlines seemed an odd choice due to Parker’s previous criticism.

However, Qatar is still looking for international investment opportunities. It rounds off the statement by saying: “Qatar Airways will continue to seek opportunities to invest in global aviation to support the airline’s goal to offer the best possible travel experience for its customers.”

Alex Baldwin
By Alex Baldwin August 3, 2017 09:47