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Astounding level of hypocrisy in the airline business as Qatar Airways’ investment in American Airlines.

The interesting result of Qatar’s investment in American is that it
exposes an astounding level of hypocrisy of which both parties are
Qatar Airways wants to buy a significant stake in American Airlines.
American says Qatar expressed interest in acquiring up to 10% of the
company, and a Qatar Airways spokesman told Business Insider that it
plans to open its investment in American with a 4.75% stake and remain a
passive investor. 

A deal like this adds a whole new dimension to the simmering
hostility between the US’s three major legacy carriers their Middle
Eastern rivals. To be more specific, the investment exposes an
astounding level of hypocrisy of which both parties are guilty.

At the heart of the controversy is the nastiest feud in the airline business.

Here’s the shorthand version of the feud: Since 2015, American,
Delta, and United Airlines (the US3) have been complaining about
competition from three huge and fast-growing Middle East-based rivals —
Emirates, Etihad, and Qatar Airways (the ME3). 

According to the US3, the ME3’s growth has been fueled by as much as
$50 billion in subsidies over the past decade, allowing them to flood
the international market and threaten the job security of US aviation
workers. They also say the ME3 are in violation of the Open Skies
agreements that govern air travel between the US and 120 nations
including the UAE and Qatar.

The feud has resulted in everything from threats by airline CEOs to businesses losing sponsorship dollars. From stranded passengers to large protests at airports. 

Over the past few years, Qatar, along with the rest of the ME3, have
denied receiving subsidies. Instead, Qatar Airways insists that it
operates like any other major private sector business with investors for
whom the company must deliver results.

However, its willingness to sink more than $808 million into American in such a turbulent time for the carrier undermines that assertion.

Over the past month, Qatar Airways has been caught in the middle of a
diplomatic crisis between the nation of Qatar and its Middle Eastern
neighbors. The dispute has resulted in Qatar Airways’ expulsion from
major markets in the United Arab Emirates, Bahrain, Egypt, and Saudi

These countries have also either severely restricted Qatar Airways’
access to or outright banned the airline from their airspace. In
addition, the Doha-based airline has been dealing with the financial
fallout from restrictions on travel and large electronics issued by the
US and UK governments earlier this year.

All of this makes the Qatari airline’s decision to spend this kind of money out of the ordinary.

“By making this investment at a time the airline is facing such
disruption to its business points out that it has access to financial
assets beyond what it has just in its own bank account,” said Atmosphere
Research Group travel industry analyst Henry Harteveldt. “It only
strengthens the argument that, at least in Qatar Airways’ case, it is a
government subsidized airline.”

However, American Airlines is far from innocent in all of this.

As much as American and the rest of the US3 would lead you to
believe that their relationship with the ME3 is unadulterated hostility.
It isn’t really the case. 

Since 2013, Qatar Airways has been a member of Oneworld — the
same airline alliance American helped found in 1999. Membership to
Oneworld gave American and Qatar access to each other’s route networks
and the ability sell tickets on one another’s flights. As a result, the
two airlines have been working together for years connecting passengers
from South Asia to North America and helping fill each others’ planes. 

Passengers flying on Qatar Airways transfer onto American Airlines
planes once they arrive in the US. Conversely, Qatar Airways’ network
allows American to expand its international network without the need to
spend billions of dollars to buy additional wide-body airliners. 

Fort Worth-based carrier has a similar setup with Abu Dhabi’s Etihad. In
fact, American proudly lists Qatar Airways and Etihad as partner
airlines on its website.

American isn’t the only one guilty of this. Delta has been the most
vocal opponent of the ME3 and yet has been touting its partnerships with
Alitalia and Jet Airways — both subsidiaries of the Etihad Aviation
Group. United also has a partnership with Jet Airways.

This means that the US3 and its lobbyists were publicly demonizing
the ME3 while happily making money off the very same airlines.

“There enough hypocrisy here to fill an A380,” Harteveldt added.

What will become of Qatar’s investment in American Airlines remains
to be seen. However, what it has done is once again remind us that
there’s always more than meets the eye when its comes to the airline

American Airlines Airbus jet.

Qatar Airways Boeing 777. 

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