Qatar Airways likes to make big moves at the annual summer air shows. This year was no exception, though the carrier managed to do it without announcing orders for any commercial aircraft. Instead it went about buying airlines.
The Doha-based company made a splash on Tuesday, announcing that it would acquire up to 10% of the South American carrier LATAM for $618mm. Speaking at that event GCEO Akbar Al Baker endorsed LATAM’s current long-term business plan, despite the expected short-term challenges the company faces with economic issues in the region.
.@qatarairways will be investing in LATAM. Subscription agreement to acquire up to 10% of share for $618mm. #fia16 #abgeek
— Seth Miller (@WandrMe) July 12, 2016
Al Baker spoke to the potential for deeper integration between the airlines from a code-share or joint venture perspective as he hopes it will allow greater feed and reach for his company. He also believes that tighter loyalty program integration is possible, beyond the reciprocity the two have as members of oneworld.
During the event AL Baker also stated that the move was part of “further investment in Qatar Airways’ global network.” That network grew even further on Thursday when the company announced a second purchase. The parent company of Meridiana, the second largest airline in Italy, will sell a 49% stake to Qatar Airways group for an undisclosed sum.
These actions by Qatar Airways are starting to look an awful lot like how Etihad has invested in some smaller European airlines such as Air Serbia. In that case the turn-around effort involved shifting aircraft around and opening up new, long-haul routes for the smaller operator. It is unclear if Qatar Airways plans similar for its new European outpost once the deal closes which is expected to happen in October 2016. It is also unclear if they have a cool name for the alliance they’re building similar to Etihad’s.
One of the biggest challenge Qatar and Meridiana face in this move is a need to cut jobs in the short term to help bring the company back towards profitability. And that sort of thing rarely goes over well in Italy. This is definitely one to watch going forward.
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