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Qatar Airways seeks stake in American

Associated Press logo Associated Press 22/06/2017 David Koenig and Michelle Chapman

Qatar Airways wants to buy 10 per cent of American Airlines, a move cloaked so heavily in international trade and politics that American's CEO finds it puzzling.

American has tried to convince two successive US administrations that Qatar and two other state-owned Middle Eastern carriers get illegal subsidies from their governments. Qatar has fought back in the increasingly nasty dispute. Now Qatar is suffering because its nation is under blockade by its Arab neighbors, who have closed their airspace to the carrier.

On Thursday, Qatar said it plans to buy an initial stake of up to 4.75 per cent of American's stock. American said Qatar CEO Akbar Al Baker told American CEO Doug Parker that he wants to acquire about 10 per cent of the airline's stock, which would cost about $US2.4 billion ($A3.2 billion). The two men met secretly in early June at an airline-industry conference in the Mexican resort town of Cancun.

Although the two airlines are on opposite sides of a trade fight, they sell seats on each other's flights and co-operate as members of the same alliance of global carriers.

Qatar said in a statement that it hopes to continue that relationship. It said it sees a "strong investment opportunity" in American, and would be merely a passive investor with no role in American's management or operations.

American, the world's biggest airline, said Qatar's bid was unsolicited, and Parker belittled it.

"We aren't particularly excited about Qatar's outreach," the CEO wrote in a memo to American employees. He said the move was "puzzling" given American's ongoing fight over claims that Qatar, Emirates and Etihad Airways receive unfair government subsidies - a fight he vowed to keep pursuing.

"If anything, this development strengthens our resolve to ensure the US government enforces its trade agreements regarding fair competition with Gulf carriers," Parker said. Earlier this month he called competition from the state-owned Persian Gulf carriers the biggest threat he has ever seen to US aviation.

Al Baker is known for brash moves and declarations. His fast-growing company has bought its way into other airlines, including the parent of British Airways, a close partner of American. Still, the timing of the announcement about his interest American caught everyone off guard, and not just because of the trade fight.

Qatar Airways is getting squeezed in a dispute between its national government and neighbouring countries led by Saudi Arabia, which accuse Qatar of supporting Islamic extremists. Saudi Arabia, the United Arab Emirates, Egypt and Bahrain have barred Qatar Airways flights and forced the Doha-based carrier to alter other flight paths to avoid flying over hostile territory.

President Donald Trump has accused Qatar, home to a massive and strategic US military base, of funding terrorism. This week, however, the State Department asked Saudi Arabia and other Arab countries to detail their complaints about the small Persian Gulf monarchy and urged a speedy end to the diplomatic crisis.

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