American Airlines Not Keen to Sell Shares
American Airlines Not Keen to Sell Shares

American Airlines Not Keen to Sell Shares

American Airlines Not Keen to Sell Shares

American Airlines' chief executive said on Thursday he is not "particularly excited" about Qatar Airways' interest in buying up to 10% of the US carrier's shares, in a letter to employees following the state-owned Persian Gulf airline's overture.
The move by Qatar Airways would expand its investments in North America as Qatar is embroiled in the region's worst diplomatic crisis in years and is locked in an airspace rights row with three other Middle East states, Reuters reported.
Separately, American Airlines Group Inc is already part of a push by US carriers to squeeze Qatar out of their domestic market.
Along with United Continental Holdings Inc and Delta Air Lines, American has pressed the US government to curb US flights by Qatar Airways and rival Persian Gulf carriers Emirates and Etihad Airways.
The US carriers charge that their Persian Gulf rivals have received billions of dollars in unfair state subsidies, allegations the Persian Gulf carriers deny.
In his letter, American CEO Doug Parker promised to continue American's "full court press ... to stand up to companies that are illegally subsidized by their governments".
He also said he found Qatar Airways' proposed investment "puzzling given our extremely public stance on the illegal subsidies that Qatar, Emirates and Etihad have all received over the years from their governments".
Qatar Airways responded on Twitter, saying: "We are glad to see American Airlines' CEO Doug Parker's perspective that he agrees with Qatar Airways' belief that American Airlines is a solid financial investment."
Shares of American Airlines rose more than 5% in pre-market trade after it disclosed the potential investment. The stock closed up 1.1%.
Qatar Airways said in a statement that it sees a "strong investment opportunity" in American and that it "intends to build a passive position in the company with no involvement in management, operations or governance".
"Qatar Airways plans to make an initial investment of up to 4.75%. Qatar Airways will not exceed 4.75% without prior consent of the American Airlines board. Qatar Airways will make all necessary regulatory filings at the appropriate time," it added.
American, in its filing, noted potential obstacles to Qatar's plan, as its rules prohibit "anyone from acquiring 4.75% or more of the company's outstanding stock without advance approval from the board". It said it had received no request from Qatar for such approval. Further, American said, "there are foreign ownership laws that limit the total percentage of foreign voting interest to 24.9%".


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