Quatar Airways increases stake in IAG to 20% in just over 18 months

It was in January 2015 that Qatar Airways first acquired a stake in International Consolidated Airlines Group (IAG), buying 9.9% of the company for approximately £1.2 billion (US$1.7 billion), shortly after which it increased this stake to 10.01%. In May this year it increased that stake to 15.01% with the acquisition of a further 5% stake valued at £518 million (USD684 million) based on the share price at the time of £5.19.
In May Qatar Airways Chief Executive, Akbar Al Baker, was quoted as saying that “We have been very happy with our investment in IAG, from a financial, commercial and strategic perspective.”
However, subsequent to the Paris and Brussels terrorist attacks, falling ticket prices and demand, plus continued uncertainty over the effects of the Brexit referendum, share prices in IAG, parent company of British Airways, have fallen considerably and the recent stock market slump has seen Qatar Airways now increase its holding in IAG to 20%, though it has no immediate plans to increase that stake further “unless there are material changes to the current situation.” European Union rules forbid foreign control of European airlines and this restricts external ownership to 49.9%.
Qatar Airways confirmed that its interest in IAG was purely financial which “evidences the continued support for the ongoing strategy of IAG.” Last Friday IAG announced it had cut back growth plans for 2016 while presenting a cautious outlook for the future, predominantly owing to due to weaker trading and the fall in the value of sterling.
BA is a founding member of the Oneworld Alliance, of which Qatar Airways is a member, while it also flies cargo for BA. In May British Airways announced it would start flying non-stop to Qatar’s capital Doha which some have seen as the start of closer co-operation between the two carriers.