Sydscott wrote:

Legally they don't need Board approval.

By AA's articles of incorporation, they do. Nonetheless, I understand the broader point - and agree with it. It is entirely possible that AA management may not really get all that bothered about this.

avek00 wrote:

Wouldn't surprise me if EK or EY was planning a similar move with an eye towards building a more comprehensive relationship with a US airline.

Could you IMAGINE what a DL/EK tie-up could do?
A380s pumping all of EK's southeast US and upper LatAm traffic into ATL?

Sydscott wrote:

hayzel777 wrote:

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.

If Qatar buys more than 4.75%, they need board approval. 10% is clearly over that threshold.

Legally they don't need Board approval. That's in the QR release as a gesture towards co-operation with American which for AA comes back to the commercial reality of any deal which can be put together. So again I see plenty of scenario's where AA shrugs its shoulders and engages with QR the same way it engages with its other major institutional shareholders. (Of which QR is just another)

I believe the corporate bylaws require board approval though. It seems Parker is not thrilled at all but he hasn't mentioned opposing the purchase as QR is buying from the open market.

commavia wrote:

I suppose AA could try and fight this move but, alas, I can't really see why AA would want to, anyway.

They wouldn't, since it would go against sharholders' immediate short term interest of elevating company stock price

Anyone to educate me on American laws for running a PLC.

In this side of the Atlantic
- buying shares does not give you a right to nominate a board member, though certainly gives votes in the general assembly to influence the selection (and in practice the biggest shareholders usually form a nomination committee)
- the board represents the company, not any individual shareholder
- the board should only pursue the best of the company and they are not allowed to favour any shareholder (or board member) at the expense of the company or other shareholders
- hence no shareholding would give Qatar the right to reduce competition between QR and AA or end ongoing disputes between them, unless that increases the profits of AA, too (in which case other regulations may apply)

There has been interesting cases, like LH controlling SN. Finnair's ownership of Norwegian did not prevent Norwegian to enter AY's turf, though possibly slowed it. (I don't mention other two different cases here.)

Non-listed companies are, however, another story and often governed my mutual agreements between shareholders.

YIMBY wrote:

Anyone to educate me on American laws for running a PLC.

In this side of the Atlantic
- buying shares does not give you a right to nominate a board member, though certainly gives votes in the general assembly to influence the selection (and in practice the biggest shareholders usually form a nomination committee)
- the board represents the company, not any individual shareholder
- the board should only pursue the best of the company and they are not allowed to favour any shareholder (or board member) at the expense of the company or other shareholders
- hence no shareholding would give Qatar the right to reduce competition between QR and AA or end ongoing disputes between them, unless that increases the profits of AA, too (in which case other regulations may apply)

There has been interesting cases, like LH controlling SN. Finnair's ownership of Norwegian did not prevent Norwegian to enter AY's turf, though possibly slowed it. (I don't mention other two different cases here.)

Non-listed companies are, however, another story and often governed my mutual agreements between shareholders.

That's a fair outline although I would change one detail:

- the board represents the company, not any individual shareholder

The Board represents all shareholders according to holders' voting share rights.

flyby519 wrote:

Anyone have a list of all the Qatar Airways investments in other airlines? Seems like they are trying to buy the whole world

And therein lies the danger. When (when, not if) the ME bubble pops, they are going to drag quite a bit of ballast down with them.....

Bavd wrote:

flyby519 wrote:

Anyone have a list of all the Qatar Airways investments in other airlines? Seems like they are trying to buy the whole world

And therein lies the danger. When (when, not if) the ME bubble pops, they are going to drag quite a bit of ballast down with them.....

But therein lies the principle of diversifying and spreading the risk - if the middle east bubble bursts the Qatar portfolio includes UK and US investments that might be in a better position to ride out any storm and keep bringing returns into the state of Qatar even if there aren't profits to be had back at home.

However if the political storm between Qatar and its neighbours spreads to Europe and North America and sanctions are introduced Qatar could potentially find its holdings in IAG and AA shares frozen, their voting rights negated and their dividends held back. I am aware this happened to Libyan invstors in the UK during the Gaddafi regime.

Qatar for some reason likes to spend money on buying stakes in other OneWorld airlines. They own 20% of IAG and 10% of LATAM. They should buy 10 % of Qantas and JAL too. Cathay Pacific would be hard because Swire and Air China already own so much stock the float is very small.

Why does Qatar want to buy stock in AA is a great question because AA is probably the only OW airline that does NOT want them. AA has been very vocal about there negatives views of the ME3. LATAM was glad to dilute the current shareholders and take Qatar's money with things in Brazil being so bad. Qatar's IAG stake came from the market but Willie Walsh likes them as a stable shareholder. Al Bakar is an enigma who thinks everyone loves him and his wallet,

Bavd wrote:

flyby519 wrote:

Anyone have a list of all the Qatar Airways investments in other airlines? Seems like they are trying to buy the whole world

And therein lies the danger. When (when, not if) the ME bubble pops, they are going to drag quite a bit of ballast down with them.....

I don't think a shareholder going bust will affect the company though.

Cheers,
AA1818

I strive to see both sides of the ME3 / Free Skies argument. Pretty much every airline around the globe gets some sort of government support, and calling some of it subsidy is widely open to interpretation and a matter of degree.

Now - at this very moment for QR to announce an intention to buy a substantial share of AA is just ODD. If QR were a normal business, it would be focused on the obstacles on hand. Most of the airspace around it is closed. Many important sources of feed to their long-haul network have been shut. Some of its African network and the GRU route are ailing with routing detours. The laptop ban is hurting its North American business. The potential instability with Qatar at its core is very likely driving some book-away and pushing fares further down. Some of its core competitors, namely Turkish and Etihad, were already hurting with soft bookings, which also pushes QR fares down.

A nearly-normal business, for-profit (or non-profit for that matter), would be acting like a potential armagedon is just around the corner.

There can be no argument against it: QR is not a normal business and right now is acting like it has a bottomless pit of money. Contrast that with Etihad (cost cutting by deleting routes and frills like limo service), and Emirates (delaying deliveries and slowing growth).

jfk777 wrote:

Why does Qatar want to buy stock in AA is a great question because AA is probably the only OW airline that does NOT want them. AA has been very vocal about there negatives views of the ME3.

AA, certainly more so than UA or DL, are exceptionally two-faced on the issue. While UA and DL have both severed interline ties with EK, EY, and QR; AA continues to interline with both QR and EY. You can bet that they've negotiated exceptionally favorable special pro-rate agreements with both carriers, and are thus profiting handsomely to the tune of tens of millions of dollars per year in the form of domestic network premiums feeding off of QR/EY long-haul operations.

Emirates being Emirates, I'd be delighted if they come up with a proposal to buy 10% of Delta next week!

winginit wrote:

jfk777 wrote:

Why does Qatar want to buy stock in AA is a great question because AA is probably the only OW airline that does NOT want them. AA has been very vocal about there negatives views of the ME3.

AA, certainly more so than UA or DL, are exceptionally two-faced on the issue. While UA and DL have both severed interline ties with EK, EY, and QR; AA continues to interline with both QR and EY. You can bet that they've negotiated exceptionally favorable special pro-rate agreements with both carriers, and are thus profiting handsomely to the tune of tens of millions of dollars per year in the form of domestic network premiums feeding off of QR/EY long-haul operations.

I say good for them. Why cut your nose off to spite yourself if you're making $$$ out of it especially when you don't know what the outcome might be?

jfk777 wrote:

Why does Qatar want to buy stock in AA is a great question because AA is probably the only OW airline that does NOT want them

I can't imagine QF would be thrilled to find QR on it's share register.

All of our unions are against this and are with the company in fighting for keeping QR away from AAG. It's the one time you'll see all of us agree.

airtran737 wrote:

All of our unions are against this and are with the company in fighting for keeping QR away from AAG. It's the one time you'll see all of us agree.

Can you articulate/elaborate the general labor position against this? I would like to understand a bit more clearly from an interested party.
What are your reasons to oppose, and can you see any possible positives?

Personally, I am not a big fan of the ME3 (not because of subsidies, mostly) and will not fly them, but given the realities of western corporate capitalism, the distinction between a preferred institutional investor and an undesirable one is rather murky for me.

Simply put, I have no idea if I should care or not. Tell me why I should care, won't you?

airtran737 wrote:

All of our unions are against this and are with the company in fighting for keeping QR away from AAG. It's the one time you'll see all of us agree.

Why? It's not like QR is going to start taking over AA routes or replace AA crews. This all around just sound like more fear-mongering.

jnev3289 wrote:

ty97 wrote:

commavia wrote:

AA's pilot union has now been quoted opposing the transaction:

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.

And why they would even care is beyond me. Not like AAB is going to become CEO after they buy a little stock

Why they would care is because this usually opens the door to ATI/JV which rarely benefit US flight crews because of the potential of Transoceanic routes to/from the US to be handed over to the foreign carriers of these JVs, which hurt the income of the the aircrews by losing routes that often bring highest level of earnings. These agreements are rarely popular with the flight crews. It's something those who fly understand how much of a threat these are.

airtran737 wrote:

All of our unions are against this and are with the company in fighting for keeping QR away from AAG. It's the one time you'll see all of us agree.

jetjack74 wrote:

Why they would care is because this usually opens the door to ATI/JV which rarely benefit US flight crews because of the potential of Transoceanic routes to/from the US to be handed over to the foreign carriers of these JVs, which hurt the income of the the aircrews by losing routes that often bring highest level of earnings. These agreements are rarely popular with the flight crews. It's something those who fly understand how much of a threat these are.

I completely understand and respect that perspective - and AA and its unions have made their position unambiguous. Although I'll just say - depending very much on how, exactly, it's crafted and what, exactly, it would and would not cover, I could plausibly imagine a scenario by which AA forming a JV with Qatar actually has almost nothing but upside for AA, and by extension, its employees.

The two global markets that drive most of Qatar's business to/from the U.S. - the Mid East and India/South Asia - are both entirely absent from AA's route map, and likely to remain so for quite some time. So more closely aligning the two carriers' networks in these areas would really have no negative effect on AA. The key caveat and carve-out, I think, would have to be the explicit and conspicuous exclusion of the transatlantic market between the U.S. and Europe. And, alas, Qatar is, indeed, notably absent from that market and doesn't seem nearly as interested to enter it as Emirates (likely driven by the 20% ownership of transatlantic heavyweight IAG).

So just following that line of thinking to its logical end ... if AA, IAG and Qatar could somehow workout some structure for a deeper relationship (possibly a multilateral, antitrust-immunized JV) covering the market between the U.S. and, in essence, Africa and Asia, would that really pose much threat to AA or its employees? As said, I could actually envision a situation where it might actually even help AA - not only in terms of providing all that much more economic incentive for Qatar to put as many people as possible onto AA planes, but even with a market like India. Theoretically, if AA, IAG and Qatar effectively became a single competitor between the U.S. and India, would their combined sales presence and the right aircraft (787) suddenly make a nonstop AA U.S.-DEL flight economically interesting again?

commavia wrote:

airtran737 wrote:

All of our unions are against this and are with the company in fighting for keeping QR away from AAG. It's the one time you'll see all of us agree.

jetjack74 wrote:

Why they would care is because this usually opens the door to ATI/JV which rarely benefit US flight crews because of the potential of Transoceanic routes to/from the US to be handed over to the foreign carriers of these JVs, which hurt the income of the the aircrews by losing routes that often bring highest level of earnings. These agreements are rarely popular with the flight crews. It's something those who fly understand how much of a threat these are.

I completely understand and respect that perspective - and AA and its unions have made their position unambiguous. Although I'll just say - depending very much on how, exactly, it's crafted and what, exactly, it would and would not cover, I could plausibly imagine a scenario by which AA forming a JV with Qatar actually has almost nothing but upside for AA, and by extension, its employees.

The two global markets that drive most of Qatar's business to/from the U.S. - the Mid East and India/South Asia - are both entirely absent from AA's route map, and likely to remain so for quite some time. So more closely aligning the two carriers' networks in these areas would really have no negative effect on AA. The key caveat and carve-out, I think, would have to be the explicit and conspicuous exclusion of the transatlantic market between the U.S. and Europe. And, alas, Qatar is, indeed, notably absent from that market and doesn't seem nearly as interested to enter it as Emirates (likely driven by the 20% ownership of transatlantic heavyweight IAG).

So just following that line of thinking to its logical end ... if AA, IAG and Qatar could somehow workout some structure for a deeper relationship (possibly a multilateral, antitrust-immunized JV) covering the market between the U.S. and, in essence, Africa and Asia, would that really pose much threat to AA or its employees? As said, I could actually envision a situation where it might actually even help AA - not only in terms of providing all that much more economic incentive for Qatar to put as many people as possible onto AA planes, but even with a market like India. Theoretically, if AA, IAG and Qatar effectively became a single competitor between the U.S. and India, would their combined sales presence and the right aircraft (787) suddenly make a nonstop AA U.S.-DEL flight economically interesting again?

I concur with this statement. The only overlap QR and AA have is Asia Pacific along with Australasia. Even then, AA does not serve as many destinations as QR does for South East Asia.

I am failing to understand why and how AA would be loosing out on this deal. They are encapuslating traffic which they never really held a foothold on.

Update.

The deal is off.

“Qatar Airways has taken the decision not to proceed with its proposed passive financial investment in American Airlines.

“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. Qatar Airways will continue to investigate alternative investment opportunities in the United States of America and elsewhere that do meet our objectives.

http://newsroom.aviator.aero/qatar-airw ... -airlines/