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June 21, 2024
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Today it emerged that Qatar Airways has bought another stake in an airline.  This time it spent $662m on a near 10% stake in Cathay Pacific.  The move by the airline follows a pattern as the table illustrates. We can expect a move in India soon, too.

The green boxes are all members of the oneworld airline alliance.  Qatar tried to get a stake in American and was rejected by its’ CEO.  American and the other two US network carriers are embroiled in a dispute with the ME3.  So the winds were not in favor of this deal, though Qatar Airways’ irascible CEO was willing to make the investment despite the dispute.

The Qatar investment in IAG has already proven to be very helpful.  Qatar was able to send several A320s to London to help BA maintain its service during a recent labor dispute.

Qatar Airways is clearly focused on buying stakes in oneworld.  Despite the regional problems with the UAE and Saudi Arabia, Qatar keeps building its airline.   Investing in other reputable airlines is a smart move.  Which is, perhaps, the mistake made by neighboring Etihad which bought stakes in weak airlines hoping to turn them around.

Looking at the members of oneworld, it could be the next stakes Qatar Airways acquires are in Qantas and JAL.   These are well-run airlines, with excellent global brands.  Thought both these airlines have seen stock prices rise because of their improved profitability, Qatar is not a short-term investor.  Its MO appears to buy a stake of around 10% to get a board seat.  By having significant stakes across the oneworld alliance, Qatar will continue to build its own brand and influence.  Rather than react the way Doug Parker did at American, these other airlines might look at how collaboration with IAG has worked.  This looks like a clean way to move towards consolidation of interests.  And at considerably lower risk than the Etihad approach.

Qatar’s approach is not unique. American recently acquired a $200m stake in China Southern.  Delta is moving towards owning 49% of AeroMexico and has 10% of Air France/KLM.  Air France/KLM bought 31% of Virgin Atlantic, and with Delta’s stake, these two now effectively control that airline.  The world’s big airlines are quietly consolidating their interests.  This keeps alliances tighter than ever.

author avatar
Addison Schonland
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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