Qatar Airways Increases Interest in BA Parent Company

The exterior of the Airbus A350 XWB is pictured during the first delivery of this new passenger jet to Qatar Airways in Toulouse, southwestern France, December 22, 2014. European planemaker Airbus delivered its first A350 mid-sized jetliner to Qatar Airways on Monday and moved to end speculation about the future of its larger A380 superjumbo. REUTERS/Regis Duvignau (FRANCE - Tags: TRANSPORT BUSINESS)

The flag carrier of Qatar, already International Airline Group’s largest single minority investor, is steadily growing its stake in the London-headquartered airline conglomerate.

International Airlines Group (IAG), the company formed as a result of the 2009 merger agreement between British Airways and Iberia Airlines, has remained true to its namesake vision; in addition to BA and Iberia, IAG also counts Aer Lingus and Spanish-based low-fare carrier Vueling among its subsidiaries. The multinational airline conglomerate has also been rumored to have explored takeover bids at Finnair and South American aviation giant LATAM. Now, the ownership of IAG itself is becoming steadily more international.

State-owned Qatar Airways has quietly boosted its investment in IAG from an initial ownership stake of 9.9 percent first purchased in January of 2015 to now holding nearly 12 percent interest in the airline group. Officials at Qatar, already IAG’s largest minority shareholder, says the Gulf carrier will actively consider increasing its investment even more in the coming months.

“We have been very happy with our investment in IAG, from a financial, commercial and strategic perspective,” Qatar CEO Akbar Al Baker told the Telegraph. “The relationship formed has helped to deliver on our westbound strategy. Furthermore, IAG’s proven management and strategic direction have been the basis on which we will continue to forge a long-term relationship.”

European Union (EU) regulations prohibit non-European carriers from owning a controlling interest in European Airlines. Although current rules limit Qatar to owning less than 50 percent of IAG, analysts say that a substantial minority holding will allow the Gulf airline to exert considerable influence in the boardroom. Just last week, British Airways announced a brand new route between London Heathrow Airport (LHR) and Qatar Airways hub at Hamad International Airport (DOH).

[Photo: REUTERS/REGIS DUVIGNAU]