Moderators: richierich, ua900, PanAm_DC10, hOMSaR
KarelXWB wrote:QR is buying from the open market, there is nothing much AA can do about it.
enilria wrote:And how does that work with Fair Skies I wonder? 10% is probably not enough to veto decisions. I'd think they'd want to go to the limit which I think is 20% in voting shares. That might get them board seats.
AABB777 wrote:Key line included in the filing:
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. It also does not alter American Airlines’ conviction on the need to enforce the Open Skies agreements with the United Arab Emirates and the nation of Qatar and ensure fair competition with Gulf carriers, including Qatar Airways. American Airlines continues to believe that the President and his administration will stand up to foreign governments to end massive carrier subsidies that threaten the U.S. aviation industry and that threaten American jobs.
anshabhi wrote:This might earn them more money every year than QR itself!
KarelXWB wrote:QR is buying from the open market, there is nothing much AA can do about it.
intotheair wrote:KarelXWB wrote:QR is buying from the open market, there is nothing much AA can do about it.
Exactly. And this notification to buy more means that QR already owns a small amount of AMR stock (IIRC up to ~4.7%). And the maximum that they can legally own in total as a foreign entity is 24.9%.
commavia wrote:Not quite, at least per AA's SEC filing. AA's corporate bylaws require board approval for any single owner acquiring more than 4.75% of shares, and AA says that it has not yet received any such formal request from Qatar. That said, I suppose AA could try and fight this move but, alas, I can't really see why AA would want to, anyway.
anshabhi wrote:This might earn them more money every year than QR itself!
commavia wrote:I can't help but that think that this would almost certainly lead to Qatar being incorporated into the existing AA-IAG ATI/JV across the Atlantic.
commavia wrote:The prospect of one massive, sprawling JV spanning from the Americas all the way to the Indian Subcontinent is pretty incredible to consider - that could be a transformational event in global aviation.
kelvin933 wrote:intotheair wrote:KarelXWB wrote:QR is buying from the open market, there is nothing much AA can do about it.
Exactly. And this notification to buy more means that QR already owns a small amount of AMR stock (IIRC up to ~4.7%). And the maximum that they can legally own in total as a foreign entity is 24.9%.
The less than 25% rule applies to the total number of shares owned by non-US investors, not each individual foreign investor.
dean wrote:Quite hard to see that a company with a fleet size over 950 planes, 6700 daily flights and 110,000+ employees worth less than eBay or other internet companies.
800M US$ for 10% seems like a good deal as AAL's current market cap is around 24.5B US$.
commavia wrote:
ty97 wrote:commavia wrote:
They don't get any say/control over the potential transaction AFAIK. They have every right to make a statement, of course, but I don't think they can do anything more. Beyond the foreign ownership rule limit for airlines stock, I don't think anyone can block a party from buying a stock on the open market.
ubeema wrote:This is going to be good . Subscribing for popcorn delivery. Summer olympics is ON. Potential matchups:
1) AA Union(s) v. AA Management (Pilots Union shot first )
2) AA Management v. AA Board
3) AA Board v. AA Shareholders
4) Public opinion v. AA brand
5) White House v. AA brand
Anything missing?
AABB777 wrote:Here is a link to the SEC filing: https://www.sec.gov/Archives/edgar/data ... 823d8k.htm
Key line included in the filing:
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. It also does not alter American Airlines’ conviction on the need to enforce the Open Skies agreements with the United Arab Emirates and the nation of Qatar and ensure fair competition with Gulf carriers, including Qatar Airways. American Airlines continues to believe that the President and his administration will stand up to foreign governments to end massive carrier subsidies that threaten the U.S. aviation industry and that threaten American jobs.
commavia wrote:AA does specifically say that no board seats would be included, and that, as quoted above, AA's position on Gulf carrier government support remains unchanged. That said, I can't help but that think that this would almost certainly lead to Qatar being incorporated into the existing AA-IAG ATI/JV across the Atlantic. The prospect of one massive, sprawling JV spanning from the Americas all the way to the Indian Subcontinent is pretty incredible to consider - that could be a transformational event in global aviation.
FlyHappy wrote:wow.
No I wonder what what sick US carrier Etihad can buy into?
enilria wrote:AA doesn't control it's board members. Phase 2 for Qatar would be to go to Fidelity and Vanguard and whoever else and say that if they pledge support for a QR board slate they will buy another 14.9% which would drive up the stock a ton. I'm not really sure I see why those guys would side with management on that. Then poof, Fair Skies is gone. They also have BA lobbying for this as they are all-in with QR.
AA's only move is to block the increase in shares beyond 4% and then Wall Street will crucify them.
ubeema wrote:This is going to be good . Subscribing for popcorn delivery. Summer olympics is ON. Potential matchups:
1) AA Union(s) v. AA Management (Pilots Union shot first )
2) AA Management v. AA Board
3) AA Board v. AA Shareholders
4) Public opinion v. AA brand
5) White House v. AA brand
Anything missing?
enilria wrote:commavia wrote:AA does specifically say that no board seats would be included, and that, as quoted above, AA's position on Gulf carrier government support remains unchanged. That said, I can't help but that think that this would almost certainly lead to Qatar being incorporated into the existing AA-IAG ATI/JV across the Atlantic. The prospect of one massive, sprawling JV spanning from the Americas all the way to the Indian Subcontinent is pretty incredible to consider - that could be a transformational event in global aviation.
No board seats may be "included", but once you get QR under the tent it is going to change things from a shareholder perspective. IAG flipped very quickly.
AA doesn't control it's board members. Phase 2 for Qatar would be to go to Fidelity and Vanguard and whoever else and say that if they pledge support for a QR board slate they will buy another 14.9% which would drive up the stock a ton. I'm not really sure I see why those guys would side with management on that. Then poof, Fair Skies is gone. They also have BA lobbying for this as they are all-in with QR.
AA's only move is to block the increase in shares beyond 4% and then Wall Street will crucify them.
commavia wrote:It will be very interesting to see where this all goes. But again, the implications and ramifications of this could be considerable. In the span of 12-18 months, AA could - theoretically - have either revenue-sharing, antitrust-immunized joint ventures and/or equity-based strategic relationships with major airlines in Europe, the Mid East, Japan, China and possibly even South America.
winginit wrote:I think we're being a bit quick to equate an unsolicited approach into the mutual pursuit of an anti-trust immunized joint venture. JVs are contingent at the most basic level on an open skies agreement; and American, in addition to United and Delta, are actively spending millions of dollars and political capital towards the pursuit of opening up the existing ATI between the US and Qatar for review.
tlecam wrote:Is Qatar buying open market shares or are they doing this via a deal with AA?
flyabr wrote:If only it were a chunk of DL that QR was buying! Now that would have been REALLY interesting!
hayzel777 wrote:If AA fights this, they will get crucified by Wall Street. They are really in quite the predicament right now.
enilria wrote:AA's only move is to block the increase in shares beyond 4% and then Wall Street will crucify them.
hayzel777 wrote:If AA fights this, they will get crucified by Wall Street. They are really in quite the predicament right now.
scotron11 wrote:Why would BA lobby for this transaction? QR have no control over BA...or for that matter....IAG. Yes, QR does have a shareholding in IAG...but certainly no control on their relations with other carriers.
commavia wrote:First off, while obviously AA's management doesn't "control" these shares or board membership, neither would any individual investor - especially one with 10% or less ownership, and freighted with enormous and consequential political and regulatory implications. I can absolutely imagine why, hypothetically, large institutional investors might side with AA management over Qatar.
Sydscott wrote:hayzel777 wrote:If AA fights this, they will get crucified by Wall Street. They are really in quite the predicament right now.
There seems to be a lot of predictions in this thread of conflict. Dare I pose the question of why American has to do anything at all with this news? So they have a new shareholder who happens to be a Oneworld Member which they already have an existing relationship with. It's not as if AA isn't going to act commercially in this so if Doug Parker doesn't see any benefit to expanding the existing arrangements with Qatar, and I struggle to see how Qatar could be a more effective Partner for AA than it is now, then he and the Board need do nothing. At worse this merely becomes a distraction.
Also worth noting that AA also has arrangements with both EK and EY of varying sorts so unless QR can come up with a deal that's more beneficial than AA's current arrangements with all 3 Gulf Carriers then nothing is going to fall out of this for QR.
Sydscott wrote:There seems to be a lot of predictions in this thread of conflict. Dare I pose the question of why American has to do anything at all with this news? So they have a new shareholder who happens to be a Oneworld Member which they already have an existing relationship with. It's not as if AA isn't going to act commercially in this so if Doug Parker doesn't see any benefit to expanding the existing arrangements with Qatar, and I struggle to see how Qatar could be a more effective Partner for AA than it is now, then he and the Board need do nothing. At worse this merely becomes a distraction.
Also worth noting that AA also has arrangements with both EK and EY of varying sorts so unless QR can come up with a deal that's more beneficial than AA's current arrangements with all 3 Gulf Carriers then nothing is going to fall out of this for QR.
enilria wrote:I really have to think those institutional investors just want to make a buck.
enilria wrote:All of Wall Street (excepting fast growth companies which get a pass) are about the short term. That's pretty clear.
enilria wrote:Besides, the long term implications of QR on AA are pretty blurry. They are no more scary than the long term implications of NK, potentially much less scary.
hayzel777 wrote:Sydscott wrote:hayzel777 wrote:If AA fights this, they will get crucified by Wall Street. They are really in quite the predicament right now.
There seems to be a lot of predictions in this thread of conflict. Dare I pose the question of why American has to do anything at all with this news? So they have a new shareholder who happens to be a Oneworld Member which they already have an existing relationship with. It's not as if AA isn't going to act commercially in this so if Doug Parker doesn't see any benefit to expanding the existing arrangements with Qatar, and I struggle to see how Qatar could be a more effective Partner for AA than it is now, then he and the Board need do nothing. At worse this merely becomes a distraction.
Also worth noting that AA also has arrangements with both EK and EY of varying sorts so unless QR can come up with a deal that's more beneficial than AA's current arrangements with all 3 Gulf Carriers then nothing is going to fall out of this for QR.
If Qatar buys more than 4.75%, they need board approval. 10% is clearly over that threshold.