In a surprise move, Qatar has indicated it wants to take a stake of up to 10 per cent in the U.S. carrier with an investment of up to 4.75 per cent.
"Qatar Airways has long considered American Airlines to be a good oneworld Alliance partner and looks forward to continuing this relationship". The Middle East's second biggest airline also owns 20 percent of British Airways-owner International Airlines Group (ICAG.L) and 10 percent of South America's LATAM.American Airlines shares are cheaper than Delta, United and JetBlue (JBLU.O) on a forward 12-month earnings per share basis, according to Thomson Reuters data, and are the cheapest among the top eight USA airlines. American's articles of incorporation also prohibit a single owner from holding more than 4.75% of the outstanding shares without the board's prior approval.
The CEOs met earlier this month during an airline-industry event in Mexico, according to an American spokesman.
"And do not worry, per US law, no foreign entity can own more than 25% of a USA airline", Parker wrote.
Qatar has filed under the Hart-Scott-Rodino (HSR) Act, and submitted the appropriate filings; the company said it has plans to make its stock purchase on the open market.
Shares of American Airlines Group (AAL) traded up 1.12% during midday trading on Friday, hitting $48.97. Along with United Continental Holdings Inc (UAL.N) and Delta Air Lines (DAL.N), American has pressed the US government to curb USA flights by Qatar Airways and rival Gulf carriers Emirates [EMIRA.UL] and Etihad Airways.
The company's stock price was up between two and three percent to almost $50 in the first hour of trading Thursday.
Al Baker is known for brash moves and declarations. Deutsche Bank AG reaffirmed a "buy" rating and issued a $55.00 target price on shares of American Airlines Group in a research report on Tuesday, January 31st.
Grella noted that the U.S. carriers "compete head-to-head with the U.S. Big Three airlines on exactly two overseas routes", suggested that their fears of lost jobs and revenue are overblown. They allege that Qatar Airways, Emirates and Etihad have been unfairly subsidised by their governments to the tune of more than $50 billion, in breach of...
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Vicki Bryan, a corporate bond analyst with independent research firm Gimme Credit, said in an update that Qatar's investment plan "may have more to do with demonstrating sovereign Qatar's continued commitment to the US amid the latest Gulf States feud".
Parker says he has not been given a reason why Qatar is interested in becoming a large, but passive investor in his airline.
"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 USA aviation industry and that threaten American jobs", it said in a filing.
The potential investment comes against the background of diplomatic and competitive turbulence for Qatar Airways, its home country and US airlines. Two weeks ago, Bahrain, United Arab Emirates, and Saudi Arabia turned their back on Qatar, accusing the tiny nation of supporting terrorist activities including the Muslim Brotherhood.
Qatar Airways made its intentions clear in a filing with the U.S. Securities and Exchange Commission.
Qatar is now in the midst of a diplomatic crisis after Saudi Arabia and several of its allies in the Middle East cut dies with Doha.
In other American Airlines Group news, Director James F. Albaugh bought 3,000 shares of American Airlines Group stock in a transaction dated Thursday, May 4th.
A tie-up with American Airlines Group could help Qatar Airways - Qatar's most recognized global brand - gain influence with both Wall Street and decision-makers in Washington. "We assume the USA government will approve the purchase given a long history of USA and foreign ownership in the airline industry".
Qatar Airways said it would not exceed this level without board approval and would "make all necessary regulatory filings" when required.
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