QATAR Airways has backed away from its surprise plan to invest in sparring partner American Airlines, saying the move no longer meets its objectives.
The Gulf carrier raised eyebrows when it announced in June that it wanted to take a stake of up to 10 per cent in the US carrier and would start with an initial investment of 4.75 per cent.
The announcement received a hostile reception from American with chief executive Doug Parker describing it as puzzling at best and concerning at worst.
Read: CEO questions Qatar move to invest in American.
Qatar said at the time that it saw the US carrier as “a strong investment opportunity”.
“Qatar Airways believes in American Airlines’ fundamentals and intends to build a passive position in the company with no involvement in management, operations or governance,’’ it said.
But in a statement issued Wednesday the airline said it had decided not to proceed with the investment.
“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.
“Qatar Airways will continue to investigate alternative investment opportunities in the United States of America and elsewhere that do meet our objectives.”
American said it respected Qatar’s decision not to proceed with its proposed investment and it in no way changed the US carrier’s course.
It was not clear what particular disclosure prompted the Qatar move.
American in July reported a second-quarter pre-tax profit of $US1.3 billion and a net profit of $US803 million.
The net profit was down from $US950m in the same quarter in the previous year but revenue was up 7.2 per cent to $US11.1 billion.
Separately, the Gulf carrier has begun code sharing with South America’s LATAM Airlines Brazil and is now offering connections to 25 Brazilian cities, including Rio de Janeiro.
Qatar has been flying to Brazil since 2010 with a Doha-Sao Paulo service that continues on to Argentina’s Buenos Aries.
It introduced a freighter service in February, 2017, and recently announced plans to fly to Rio in 2018
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