Qatar Airways eyes 10% of American Airlines

American Airlines shares climbed 3% in response to news of the unsolicited approach from Qatar Airways, which said in a statement that it is planning to buy an initial stake of 4.75%.

"The proposed investment by Qatar Airways was not solicited by American Airlines and would in no way change the Company's Board composition, governance, management or strategic direction", American said in the filing.

Bloomberg quoted American and said Qatar Airways intends to invest at least $808mn in the Fort Worth-based airline.

CNBC notes that this offer is somewhat shocking, as American's CEO Doug Parker has not shied away from criticizing Gulf carriers like Qatar in the past, "arguing they receive subsidies [that] have potentially hurt USA carriers as a result".

Conversely, Qatar's Airways latest investment interest, AA did not feature on the top twenty of the list.

In a letter to employees, American's chief executive, Doug Parker, said that rival Qatar Airways' plan was "puzzling given our extremely public stance on the illegal subsidies" that American alleges Qatar Airways and the other two gulf carriers receive. Most of the states involved have closed off their airspace to Qatar Airways and have stopped flights in and out of the country.

Qatar's government denies all the allegations. "Qatar Airways will not exceed 4.75% without prior consent of the American Airlines board".

Despite the tension, Qatar Airways and American have been partners in the OneWorld alliance since 2013.

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The two airlines have had their differences in recent months. "For every long-haul route lost or foregone as a result of subsidized Gulf carrier competition, more than 1,500 American jobs are lost", the letter in February said.

"We can not control who sells or purchases" our stock, Parker said.

Qatar is purchasing the shares on the open market, so there is little American Airlines can do now.

President Donald Trump has tweeted criticism of Qatar, despite the presence of a massive and strategic US military base within its borders.

The Company also noted that foreign ownership laws limit the total percentage of foreign voting interest to 24.9 per cent.

Qatar a year ago set up a revenue-sharing partnership with British Airways parent International Airlines Group, deepening its partnership with that company.

A tie-up with American Airlines Group Inc. could help Qatar Airways - Qatar's most recognized global brand - gain influence with both Wall Street and decision-makers in Washington.

In addition to being voted "Best Airline" by travellers from around the world, Qatar's national carrier also won a raft of other major awards at the ceremony, including "Best Airline in the Middle East", "World's Best Business Class" and "World's Best First Class Airline" lounge. And in December it announced a 10 percent stake in Chile's LATAM Airlines Group, acquired for $608m.

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