Qatar Airways has submitted a filing under the Hart-Scott-Rodino Act (HSR) with respect to its potential investment in American Airlines common stock (more than an $81m investment requires DoJ approval, typically 30-day process). They claim that the two Middle Eastern governments have provided more than $40 billion in subsidies to their airlines, including Qatar Airways, allowing them to essentially dump capacity in the United States market.
But American, United Airlines, and Delta Air Lines have been pushing US political leaders to curtail the growth of the Middle East's three biggest airlines, Qatar, Emirates and Etihad, saying that they are subsidized airlines that have competed unfairly.
Per the US' foreign ownership laws, Qatar Airways would ultimately be capped at owning 24.9% of any airline in the country. "In that case, we would agree with them".
The shares rose 5.5 per cent to US$51.10 at 9:00am in premarket trading in NY. 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. This year was not one of those years, as 2017's Airline of the Year isn't the same as 2016, but a familiar face no less: Qatar Airways. The countries have suspended flights to and from Qatar. Dennis Tajer, a spokesman for the Allied Pilots Association, accused Qatar of "asymmetric financial warfare".
Qatar's pursuit of American is the Doha-based carrier's latest move to buy shares in its Oneworld partners.
White House responds to Comey tape inquiry with Trump tweet
I am gravely concerned by all of this and have concluded that Robert Mueller should recuse himself from further involvement. Legal experts say whatever connection they do have doesn't come close to meriting Mueller's removal as special counsel.
Parker said in his letter that American Airlines "will not be discouraged or dissuaded from our full court press in Washington, D.C., to stand up to companies that are illegally subsidized by their governments". It owns just over 20 percent of IAG, which also controls European carriers Aer Lingus, Iberia and Vueling.
CNBC reported American shares climbed by more than 5 percent Thursday morning.
American's board must approve any investments that involve more than 4.75% of the carrier's outstanding shares.
Qatar Airways recently notified American it's interested in purchasing at least $808 million in stock on the open market.
Qatar Airways already holds stakes in other foreign carriers, including a large holding in International Consolidated Airlines Group, the parent of British Airways. Michelle Chapman reported from New Jersey.
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