DOHA: Qatar Airways hasn’t given up on investing in the US after scrapping plans to buy a stake in American Airlines Group Inc. amid opposition from the Fort Worth, Texas-based company.
“We have other opportunities, both in America and North America, which we will consider,” Akbar Al Baker, the Persian Gulf carrier’s chief executive officer, said Wednesday in the Qatari capital Doha. “I have some things in mind. The US is an important market for us.”
Qatar Air ended its interest in American on Aug. 2 after the US company’s chief, Doug Parker, said he wasn’t keen on having a Gulf shareholder. While the carriers are partners in the One world alliance, the approach came as a surprise since American had been vocal in opposing the growth of Mideast airlines over claims that they’ve benefited from US$50 billion (RM214 billion) in illegal aid.
While Qatar Air initially suggested that it walked away because of the “latest public disclosure” by American, appearing to allude to a July 28 financial statement, Al Baker said his chief concern was the push-back from Parker. The fact that Qatar would have been limited to buying a 4.75 per cent holding in the open market without the backing of the US giant was also a deal breaker.
“We would have wanted to take up to 10 per cent, for which we would need board approval, and we realized we are not going to get it,” he said. “When we are not welcomed by the CEO of the company, who is of course also a shareholder, why should we then invest?”
Al Baker said his interest in building a stake was motivated by “confidence in the US aviation industry,” rather than being aimed at “influencing” American in the debate over Gulf funding, which has seen it join forces with Delta Air Lines Inc. and United Continental Holdings Inc. in demanding that the federal government limit market access for Middle Eastern airlines.
India due ‘soon’
With Delta and United both opposing Gulf growth, as well as being leaders of the Skyteam and Star alliances that rival One world, Qatar Air’s room for maneuver may be limited to smaller American operators. A renewed investment push might also be less than welcome politically, given President Donald Trump’s drive to protect American jobs and efforts to limit travelers from predominantly Muslim countries. Foreign stakes in US carriers are capped at 25 per cent.
Qatar Airways will push on with plans to secure further partners and anchor stakes, the CEO said, and is on course to establish a new airline in India, the fastest-growing major aviation market, where it has been working toward the required legal filing. “You will hear soon,” he added.
Al Baker has already led the purchase of a 20 per cent stake in British Airways owner IAG SA, a close ally of American, and 10 per cent of Latam Airlines Group SA, the biggest South American carrier, and is planning to buy 49 per cent of Italian operator Meridiana SpA. The partnerships and deals have helped broaden Qatar Air’s footprint as it competes with Dubai-based Emirates, the biggest long-haul airline, in the lucrative inter-continental travel market.
“We can independently grow but we feel that it is always in the interest of any business to make alliances and to make investments,” he said, adding that should Qatar Air ever sell shares and American want to take a stake, “we would support it.”