DOHA (WASHINGTON POST) - Qatar Airways said it wouldn't proceed with a planned investment in American Airlines Group, following a chilly reception from the US carrier.
Buying a stake "no longer meets our objectives," Qatar Air said in an emailed statement on Wednesday (Aug 2), alluding to the latest "public disclosure" by American without elaborating.
The US carrier reported financial results July 28, capping an earnings season in which rising concerns about airlines' pricing power dragged industry stocks to their worst month in a year.
The decision by Qatar Air marks a victory for American chief executive officer Doug Parker, who called the proposed stake purchase "puzzling at best and concerning at worst."
American, Delta Air Lines and United Continental Holdings have fought a running battle against Qatar Air and two other Persian Gulf carriers, which US airline executives accuse of getting unfair advantages from US$50 billion in alleged government subsidies.
Qatar Air had been interested in acquiring about 10 per cent of American, which would have put the state-owned company on par with Warren Buffett's Berkshire Hathaway among shareholders of the world's largest carrier. Any stake purchase of more than 4.75 per cent would have required approval by the US airline's board.
The Middle Eastern carrier, led by CEO Akbar Al Baker, said it would "continue to investigate alternative investment opportunities in the United States of America and elsewhere that do meet our objectives." Qatar Air owns major stakes in British Airways parent IAG and Latam Airlines Group.
The nation of Qatar is embroiled in a standoff with a Saudi-led alliance that severed their diplomatic and transport links in June. The dispute broke out after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt accused Qatar of backing extremism and imposed sanctions.
Qatar denies supporting terrorism, and says the moves against it were an attempt by Saudi Arabia to impose its will on smaller nations in the Persian Gulf. Qatar's isolation has forced the world's richest country on a per capita basis to open new trade routes to import food, building materials and equipment for its natural gas industry. It also triggered a rating downgrade of Qatar's sovereign debt by S&P Global Ratings.