Okay folks, we need to stop this right now. Like, we all need to write our congresspeople, Tweet the president, etc. American jobs are at risk. If this deal goes through, we won’t be able to get the military where they need to go. Every single person in the US airline industry could be out of a job if this happens. Heck, this is downright illegal!
Oh, wait, sorry, those are just the alternative facts that the US airlines would like to have you believe, at least when it’s convenient. When it’s not convenient, they’ll gladly do business with these companies.
It’s being reported today that Qatar Airways is interested in buying up to a 10% stake in American Airlines. Per American’s 8-K filing today, Qatar Airways wants to acquire at least an $808 million stake (~4%) in American, but potentially up to a 10% stake.
No one can acquire more than 4.75% of American’s outstanding stock without approval from the board following a written request, and as of now the board hasn’t received such a request. Furthermore, while Qatar Airways is only considering a 10% stake as of now, they are limited to acquiring a 24.9% stake, due to foreign ownership laws.
A lot of you are probably saying “wait a second, don’t the big three US carriers constantly trash the Gulf carriers and accuse them of trying to destroy American jobs?” Yep, they sure do, which is why I can’t wait to see how this will go down.
American’s 8-K filing also makes clear that this would in no way change the company’s strategic direction, or the company’s need to “enforce the Open Skies agreement:”
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 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.
Right. I’m sure they’ll feel that way when Qatar Airways is one of the company’s largest shareholders.
This wouldn’t be the first time that Qatar Airways is buying a stake in a foreign carrier. They’ve also taken a stake in British Airways’ parent company, IAG, which in the meantime has been increased to 20%. It’s worth pointing out that British Airways doesn’t have many bad things to say about the Gulf carriers. Neither does Air Serbia. Or Alitalia. Or Meridiana. Or now even Lufthansa.
I wonder why?! But as American has promised — and airlines never lie — this wouldn’t change their perspective on Gulf carriers needing to be stopped.
In all honesty, what’s Qatar Airways’ motivation in this investment? I’d say it has both financial and political reasons:
- The Gulf countries are looking for ways to diversify their assets and develop economies that are sustainable long term, and nowadays the US airlines are a pretty stable investment, but of course there’s also a vested interest here
- Much more importantly, the Gulf airlines are constantly being attacked by the US airlines, and you can bet with certainty that we won’t hear American say another thing on this topic if Qatar Airways is one of their biggest shareholders, despite what American says now
- Qatar Airways in particular has even bigger issues right now, including the electronics ban, their isolation from their neighbors, etc.; by gaining favor with a US airline, they’re probably hoping to gain favor on a larger scale as well
- I’m sure Qatar Airways would love to form some sort of a joint venture with American, which frankly could very well be mutually beneficial, despite American’s stubbornness at the moment; similarly, British Airways and Qatar Airways formed a joint venture between Europe and the Middle East, which has worked out quite well so far
- This will be great PR for Qatar Airways, and will support Trump’s “America first” policy; Qatar Airways can say “see, we’re investing in America too!”
This is still in the very early stages. On one hand Qatar Airways’ CEO is always optimistic and can’t really be trusted, but at the same time the airline has a history of investing in foreign airlines, and this one seems logical enough. I’ll be very curious to see how this story develops.
As someone who is tired of the lies being told by US airlines, I’d sure love to see this happen…
I’ll be curious to see how this unfolds, and if American tries to stop this. I’m not sure if a poison pill is an option in a situation like this, or if they’d have another practical way to block this. Though perhaps it’s all a moot point, because something tells me American is perfectly happy having this go through, despite the rhetoric they’ve been spewing for years.