Qatar Airways had acquired a 9.99% stake, worth 1.15 billion pounds or $1.7 billion in International Consolidated Airlines building better ties with the owner of Iberia and British Airways it collaborates in the one world alliance.
Qatar’s national airline announced that it would be looking to strengthen its commercial ties with the carrier and might consider increasing its share over a period of time, although currently it was not intending to pass its current 9.99% stake.
IAG is an excellent opportunity to develop further our strategy westward, said Akbar Al Baker the CEO at Qatar Airways
Shares of IAG, which have increased 44% in the past three months, increased Friday morning in early trading in Europe.
One industry analyst said the investment by Qatar Airways was a big endorsement for IAG and the new tie in would help create many opportunities across Southeast Asia, the Middle East and India. Qatar has an extensive network throughout the Middle East.
The analyst said the huge growth in capacity from carriers in the Middle East, such as Emirates, Etihad Airways and Qatar was putting more pressure on the hubs of carriers based in Europe.
Another industry analyst said the strategy could be looked as being defensive, if you cannot beat them, why not join them and in time should improve the competitive positioning of IAG very likely at the expense of Lufthansa and Air France.
Willie Walsh the CEO at IAG said the two would talk about the opportunities that exist to work closer together and further the ambitions of IAG.
IAG is a leading transatlantic carrier and trying to acquire Aer Lingus the Irish airline for $1.5 billion, which would increase its slots for takeoff and landing at its hub Heathrow Airport in London.
Qatar Airways is owned by the sovereign wealth fund of the country, and has competed with rivals Etihad and Emirates to become a leading global carrier.