American Airlines Inc. is currently in a trade conflict with two carriers, namely Abu Dabi’s Etihad Airways and Qatar Airways. As a consequence, American decided to put an end on their collaboration by annulling their codeshare agreement. At the same time, Qatar Airways is looking to invest in a 10% stake in the U.S. carrier.
Qatar Airways Plans to Purchase 10% Stake in American Despite Opposition
American Airlines is the largest carrier in the United States. According to a filing with the Securities and Exchange Commission, Qatar Airways replaced an antitrust filing with the Federal Trade Commission with a new one on Monday. Last month, Qatar showed signs of interest in purchasing a 10% stake in American despite the encountered opposition.
However, this deal might never see an ending. That’s because American has clear rules that stipulate that no intention of 4.75% or higher stake purchasing can go through without the approval of the board. On top of that, the company posted a notification that showed some foreign ownership laws that place a 24.9% limit on foreign voting interest.
American Cancelled Codeshare Agreement with Gulf Rivals Due to Unfair Competition
In the meantime, American Airlines proceeded with a cancellation of its codeshare agreement with Gulf competitors. This kind of contract gives airlines the right to book their passengers on other company’s flights. American is one of the U.S. carriers that accused Emirates Airline, Etihad, and Qatar Airways of unfair competition. Thanks to state subsidies, they can offer competitive prices to customers of long-haul courses.
American reassured its clients that this decision wouldn’t change price levels within the company. This annulment was only a sign of protest regarding illegal subsidies that its rivals enjoy. At the moment, the White House investigate U.S. carriers’ request to limit Middle Eastern companies’ access to U.S. airports. However, the Gulf parties denied any allegations regarding their subsidies.
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