American Airlines has been getting close with Qatar Airways, so close they appear as though they’re violating anti-trust laws; so close there’s speculation that Qatar could once again try to buy a stake in American Airlines and this time it would be welcomed.
- American Airlines announced it would leave the New York JFK – Doha market at the end of October. Qatar Airways immediately adds a New York JFK – Doha flight.
- American’s Doha service gets moved to Philadelphia. Qatar Airways contemporaneously exits the Philadelphia – Doha market.
- While American and Qatar Airways are partners, they do not have anti-trust immunity. They are not permitted to coordinate their schedules and pricing. But it sure looks more the coincidental.
Qatar Airways once considered leaving the oneworld alliance, over hostility from American Airlines (and Qantas). American terminated its codeshare agreement with Qatar and Etihad. American was lobbying the U.S. government to limit its flights to the country.
These political efforts were first rejected by the Obama administration, and culminated in a White House meeting with President Trump where Trump mocked then-American CEO Doug Parker over his airline’s flagging share price.
Qatar Airways tried to invest in American Airlines but got rebuffed with ‘one weird trick’.
Going over 4.75% ownership in the airline would have required the airline board’s agreement — a tool to protect the company from losing net operating losses retained in bankruptcy but lost in the event of change of control. Use of this to reject Qatar’s investment was a pretext. No such change of control concerns were raised when Warren Buffet invested.
Once the effort to limit U.S. flying by Qatar Airways, Emirates and Etihad failed, Parker called the issues with Qatar ‘resolved’ and they re-built their partnership.
Veteran aviation industry analyst Holly Hegeman, who once worked for Bob Crandall producing American’s annual report, says it is “inevitable” now that Qatar Airways will invest in American, that American needs the money and that the stake would likely be a large one limited only by U.S. foreign ownership rules.
Inshallah, I hope so.
Anything to improve AA. I would like to see Akbar Al Baker with a Board seat, preferably as Chairman, although I know that’s a long shot.
I am not sure an investment in AA drives any change to AA operations. QR seems to play a fairly passive role based on its IAG and LATAM investments. That said, I would expect it to happen
Not sure there is any real basis for believing a QR is on the horizon; the network changes are part of the development of their relationship which carriers do – AA and QR just don’t have ATI so have to be very careful about how they “work together”
NOL (tax) carryovers are valuable to airlines – the boom and bust cycles mean that US airlines essentially use their tax losses accumulated during the bust periods to avoid paying cash taxes when things are good. AAL is not going to give those up.
AAL’s market cap right now is less than $10 billion. A 5% investment would yield half a billion dollars – max. A QR investment isn’t going to make or break AAL’s debt service ability or its market cap relative to DAL – which is more than 2.5X higher than AAL, or UAL or LUV – over 1.5X AAL’s market cap.
QR is a foreign entity from US investor laws, Warren Buffett is a US citizen
It’s an interesting possibility. Given AAs significantly increased new labor costs, it would be interesting to see if Qatar felt this option would be the best place to spend half a billion dollars.
While there are always drawbacks it would be nice to have some new blood on the Board that might actually move AA back towards being a quality airline with leadership rather than management.
American Airlines, in its race to the bottom, can only get better with a Qatar investment, however, it being AA, watch them take the money and run, straight to the bottom. Sadly.
Qatar is industry leading in terrible customer service. Sure they have shiny seats, but everything else about them is bad.
Giving Akbar Al Baker a board seat would sure be entertaining!
“Chesterwilson” they can not be any worst than AA is now, the only worse airline is Spirit. As a Alaska FF (MM’er) we are no more happy with the partnership with AA today as we were when it was announced it’s a bust for us.
@chesterwilson have you ever actually flown QR or are you just talk out of your posterior? I have flown them over a dozen times and they are unquestionably one of the best hard and soft products in the sky. And, their hub is luxurious, efficient and a pleasure to use.
They are all the things AA is not.
They will help reduce/shrink in half AAs on board rest rooms to squeeze more cattle seats in.And upgrade the catering with pop tarts and spahgettios
Hmmm good
The question is: What exactly would QR gain from any investment in AA?
Qatar is NOT a country i want to visit or have a say in AA . This is a place here homosexuality is punishable by the death penalty. This is a place where flogging and stoning is imposed as criminal sanctions against its own citizens.
I do not really want to have a lay over in that country under any circumstance. It is like saying Lets stop over in North Korea for a lay over.
Middle East airlines service is usually exemplary in the air until you have to a problem and need to call customer service and the support is nonexistent
@Tomri
Have a snickers
@1KBrad
A seat at the table is what Qatar gets. The ability to influence routes and get more direct flights from their hubs to the US on AA rather than having to invest in more planes and look for gates in the cities they want to get to in US?
@Mets Fan in NC: For a less than 5% interest?
@Tomri while I totally agree with you, is Qatar really any different than Florida or Texas?
“…….leadership rather than management.
That’s the best thing I’ve read in a month.
Did QR want an LCC?
Flogging? Wow.
On a side note. What’s their crime rate like compared to San Fran, Seattle, Portland, la, Chicago, nyc, and so on and so on and so on and so on.
Honestly. Please provide the comparison so we can have a reasonable discussion on punishment for crimes. Don’t just be a baby and boo boo over not giving criminals Twinkie’s, tv and trans surgeries. Let’s actually look at the effectiveness of the punishment as a deterrent.