The surprise investment push by Qatar Airways was disclosed by American Airlines in a securities filing Thursday saying the Qatari company planned to buy at least $808 million in American shares.
The Gulf carrier said it would not exceed an investment of 4.75 per cent without prior consent of the American Airlines board and would it would l make all necessary regulatory filings "at the appropriate time'". Qatar Airways also has designs on a stake as large as 10%, American said.
CNBC notes that this offer is somewhat shocking, as American's CEO Doug Parker has not shied away from criticizing Gulf carriers like Qatar in the past, "arguing they receive subsidies [that] have potentially hurt US carriers as a result". The countries have suspended flights to and from Qatar. The company said it hadn't received any such notice.
Qatar said in a statement that it hopes to continue that relationship. The company has also been open with American Airlines Group Inc about acquiring the stake.
Qatar Airways' outspoken CEO, Akbar Al Baker, has said he expects the United States to intervene quickly to resolve the dispute, but seeking a 10% stake in an airline named "American" is not likely to sit well with the current administration in Washington. Over the last couple of years, American, United and Delta have been pushing regulators stop Persian Gulf Carriers from expanding into the USA, arguing the gulf carriers are illegally subsidized by the governments where they are based.
The two airlines have had their differences in recent months. Other airline stocks rose as well.
American's shares were up 53 cents, or about 1 percent, to $48.96 in afternoon trading after surging more than 4 percent Thursday morning.
The announcement comes months after Warren Buffett's Berkshire Hathaway (BRKB) has built up stakes in the top US airlines.
President Donald Trump has accused Qatar, home to a massive and strategic USA military base, of funding terrorism. And, American noted that there are foreign ownership laws that limit the percentage amount of foreign voting interest to 24.9%.
Among other things, the management and the employee unions of the Big Three U.S. lines - American, Delta and United - have been waging a very public campaign aimed at curbing the growth of their Middle East rivals.
American Airlines has said it would respond "in due course" to the offer.