Qatar Airways Is Not Investing In American After All

Qatar Airways Is Not Investing In American After All

10

In late June, Qatar Airways announced their intentions to buy up to a 10% stake in American Airlines. Per a filing at the time, Qatar first wanted to acquire an $808 million stake (~4%) in American, and was considering increasing that at a later point. While I’d usually call Qatar’s bluffs, the airline has purchased a significant stake in IAG, the parent company of British Airways, so this move didn’t seem that unusual.

Not surprisingly, American’s CEO claimed he wasn’t “particularly excited” about this news, and described the news for many as “puzzling, at best, and concerning, at worst.” This is probably largely due to the dispute between US carriers and Gulf carriers, and really he had to say that, give the (deceptive) smear campaign that the US carriers are running against the Gulf carriers.

Well, it looks like this is now off the table. Qatar Airways has announced that they won’t be proceeding with their investment in American Airlines. Per a statement from Qatar Airways:

Qatar Airways has taken the decision not to proceed with its proposed passive financial investment in American Airlines. 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. Qatar Airways will continue to investigate alternative investment opportunities in the United States of America and elsewhere that do meet our objectives. 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.

It’s interesting that they say this “investment no longer meets [their] objectives.” Officially I assume their objective in investing in a company would be to get a return on their investment, rather than any ulterior motives.

However, reading between the lines I suspect another objective of the investment was to try and have some soft power over American, get them to cooperate better, etc. I’m not sure if anything went on behind the scenes to make them realize that’s not happening, or what. It’s also entirely possible that Qatar is just in a bad situation right now with too much going on, so they don’t want to spend nearly a billion dollars on this right now.

So we don’t really know why Qatar Airways changed their mind, or just how serious they were at the beginning, rather than just playing a big mind game.

Conversations (10)
Newest comments are displayed first.

The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.

Type your response here.

If you'd like to participate in the discussion, please adhere to our commenting guidelines. Anyone can comment, and your email address will not be published. Register to save your unique username and earn special OMAAT reputation perks!

  1. Mark

    @Chris K - how true when you say:

    These middle east countries are certainly not very wise investing their oil wealth. Especially considering that the the advancing electrification of the car fleet combined with massive buildout of wind and solar power plants at grid parity cost will steamroll them. Imagine, Etihad/ UAE also wasted 3 billion funding ongoing operating losses at Air Berlin and Alitalia.

    And don't forget to mention their antiquated sewage systems....

    @Chris K - how true when you say:

    These middle east countries are certainly not very wise investing their oil wealth. Especially considering that the the advancing electrification of the car fleet combined with massive buildout of wind and solar power plants at grid parity cost will steamroll them. Imagine, Etihad/ UAE also wasted 3 billion funding ongoing operating losses at Air Berlin and Alitalia.

    And don't forget to mention their antiquated sewage systems.

    Easier to waste oil money on soccer and Royal Family fun.

  2. Chris K

    @Petri, they ("Qatar Sports Investment") actually pay 800m euros or almost 1b usd for Neymar!

    The transfer fee is only a part of that. On top of that, Neymar will earn 450m euros for 5 years, his father will earn 100 million as an adviser and presumably for helping to broker the deal. Plus a few smaller items that I've forgotten already.

    These middle east countries are certainly not very wise investing their oil wealth....

    @Petri, they ("Qatar Sports Investment") actually pay 800m euros or almost 1b usd for Neymar!

    The transfer fee is only a part of that. On top of that, Neymar will earn 450m euros for 5 years, his father will earn 100 million as an adviser and presumably for helping to broker the deal. Plus a few smaller items that I've forgotten already.

    These middle east countries are certainly not very wise investing their oil wealth. Especially considering that the the advancing electrification of the car fleet combined with massive buildout of wind and solar power plants at grid parity cost will steamroll them.

    Imagine, Etihad/ UAE also wasted 3 billion funding ongoing operating losses at Air Berlin and Alitalia

  3. Miles and Smiles

    Petri Qatar doesn't sponsor PSG fly Emirates does and its 222 million pounds

  4. Mike

    Good! QR needs to stick to their knitting for the time being. They have much bigger fish to fry.

  5. Petri

    They figured spending almost 300 million to get a brazilian footballer from Spain to France was a better deal?

  6. Andy

    Aw, and I was really hoping this would mean AA would actually be a good airline! A man can dream...

  7. Kerry

    American has outdone itself in stupidity lately, getting drawn into this fight against the ME3 that is really only in the interests of Delta, therefore ending their codeshares with QR and EY, and proceeding with Basic Economy across the system even though both they and United admitted in their earnings calls that American is gaining market share to date by NOT introducing it.

    Sad but not surprising to see Qatar pull their investment. While I...

    American has outdone itself in stupidity lately, getting drawn into this fight against the ME3 that is really only in the interests of Delta, therefore ending their codeshares with QR and EY, and proceeding with Basic Economy across the system even though both they and United admitted in their earnings calls that American is gaining market share to date by NOT introducing it.

    Sad but not surprising to see Qatar pull their investment. While I know AA didn't welcome the Qatari cash, I was hoping it would start a process to usher in more cooperation between the two in the long run (and hopefully inject improved management and service culture into AA).

    Guess we just see more "copy Delta at all costs" instead.

  8. JC

    This is so sad. Qatar's investment could have assisted American Airlines in their goal "Going for Great!"

    I was so looking forward to Qatar and American cooperating more fully with this share purchase including stronger connecting flight integration at PHL from American to the Qatar flight.

  9. Jerry

    I reported this on your Qatar post immediately preceding this post Lucky....credit to the source

Featured Comments Load all 10 comments Most helpful comments ( as chosen by the OMAAT community ).

The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.

Mark

@Chris K - how true when you say: These middle east countries are certainly not very wise investing their oil wealth. Especially considering that the the advancing electrification of the car fleet combined with massive buildout of wind and solar power plants at grid parity cost will steamroll them. Imagine, Etihad/ UAE also wasted 3 billion funding ongoing operating losses at Air Berlin and Alitalia. And don't forget to mention their antiquated sewage systems. Easier to waste oil money on soccer and Royal Family fun.

Joe

Well they are reasons

Chris K

@Petri, they ("Qatar Sports Investment") actually pay 800m euros or almost 1b usd for Neymar! The transfer fee is only a part of that. On top of that, Neymar will earn 450m euros for 5 years, his father will earn 100 million as an adviser and presumably for helping to broker the deal. Plus a few smaller items that I've forgotten already. These middle east countries are certainly not very wise investing their oil wealth. Especially considering that the the advancing electrification of the car fleet combined with massive buildout of wind and solar power plants at grid parity cost will steamroll them. Imagine, Etihad/ UAE also wasted 3 billion funding ongoing operating losses at Air Berlin and Alitalia

Meet Ben Schlappig, OMAAT Founder
4,523,713 Miles Traveled

25,807,500 Words Written

28,675 Posts Published