Weeks after announcing its intentions to buy a 10 percent stake in American Airlines, Qatar Airways has canceled plans to invest in the carrier.
In a statement, Qatar’s national carrier told the Financial Times that “the investment no longer meets our objectives.”
“Further review of the proposed financial investment, taking into account the latest public disclosure of American Airlines, has demonstrated that the investment no longer meets our objectives,” it said.
The disclosure that the airline is referencing may be last week’s second-quarter earnings report. In it, American Airlines beat expectations.
Additionally, its share price is almost $2 higher now than it was after Qatar Airways announced plans to invest in it last month.
This suggests the price may no longer be right for Qatar to buy such a large share.
Another reason for pulling back on investment plans could be resistance from American itself. Its CEO previously said a closer relationship simply doesn’t make sense.
It’s “confusing to our team and we don’t like that,” Doug Parker said last month.
AA is one of three US carriers who have accused Gulf carriers of competing unfairly with the help of government subsidies.
The trio has been lobbying to limit the growth of Gulf carriers into the American market on that basis.
However, Qatar Airways, which is government-owned, has denied the allegation. So have Emirates and Etihad.
For its part, American said yesterday, “We respect Qatar Airways’ decision not to proceed with its proposed investment in American Airlines.”