Qatar Airways ups stake in British Airways parent IAG to 25%
Qatar Airways increases its stake and now owns 25.1% of International Airlines Group (IAG), the parent company of multiple European carriers including British Airways and Iberia.
The Qatari company previously held 21.4% of IAG shares and has been the single largest shareholder of IAG since 2016. Having acquired its first IAG shares in 2015, the Doha-based airline has upped its investment several times before reaching 20.01% in 2016.
The latest rise of stake was announced by Qatar Airways on February 19, 2020. “Our investment to date has been highly successful and the announced increase in our shareholding is evidence of our continued support of IAG and its strategy,” Akbar Al Baker, Qatar Airways Group Chief Executive, is cited in the company’s statement as saying.
In January 2020, IAG removed its limit of non-EU shareholding, as non-EU persons held 39.5%, as the company announced on January 17. The EU law requires air carriers to be majority-owned by EU shareholders. Assuming that Qatar’s shareholding increase was not reflected back then, currently 43.2% of the airline group’s shares could be owned by non-EU companies. In contrast, at the same time the prior year (February 2019), non-EU shareholders held 47.5% of IAG shares.
The two companies had their highlight moments of working together. Take, for instance, July 2017, when facing weeks-long mixed fleet crew strikes, British Airways turned to Qatar Airways to wet-lease its Airbus A320 aircraft with a crew. At the time, the Qatari airline was just starting to feel the consequences of airspace ban by neighboring countries, imposed a month prior.
In November 2019, William Walsh, CEO and Executive Director of International Airlines Group (IAG), described the Qatari airline as a very supportive shareholder and a very good long term financial investor, but denied that Qatari airline has any influence on IAG’s strategy. “We do not have any consultation with them in terms of where the business is going,” Walsh told investors on November 8, 2019. “We do not consult with them on any strategic issue.”
The International Airlines Group was formed in 2011, when British Airways and Iberia (both the flag carriers of, respectively, UK and Spain). The group currently also includes passenger airlines Aer Lingus, Level, and Vueling.
Qatar Airways investment in Air Italy
“Qatar Airways continues to consider opportunities to invest in airlines and support management teams that share our vision to enhance travel opportunities for airline passengers across the globe,” Al Baker added in the statement. It appears that the company currently has an opening for that, following the failure of its another European investment, Air Italy.
Qatar Airways bought a 49% stake in the Italian airline, then called Meridiana, in September 2017. The remaining 51% was retained by the carrier’s original owner Alisarda.
In February 2018, Meridiana merged with its subsidiary Air Italy, taking up the latter’s name, got a new hub and a new ambitious strategy. The original plans included growing its passenger numbers fourfold to 10 million, boosting the fleet (made of Boeing 737 MAXs) to 50 aircraft and, overall, becoming Italy’s national carrier by 2022.
However, after a very ambitious growth period, including new flights to New York John F. Kennedy International Airport (JFK) and Miami International Airport (MIA), the reality soon kicked in. Air Italy its FY2019 with a $148.8 million loss, of which $72 million fell to Qatar Airways to absorb. On February 11, 2020, shareholders decided to liquidate the company.
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