Qatar Airways ditches plan to buy American Airlines stake

Qatar Airways has confirmed it would not be going ahead with its controversial plan to a buy a stake in American Airlines.

In June, the Qatari flag carrier said it would buy a 10% stake in the US airline.

The move surprised the market as well as executives at the US airline and came despite American Airlines' chief executive Doug Parker's vocal opposition to alleged "illegal subsidies" that certain Middle Eastern carriers receive from their governments.

Including Qatar Airways in his scathing criticism, Parker announced last month that American Airlines would cancel its code-share agreement with the airline which sees the carriers market agreed flights between each other.

Previously, Parker had described Qatar's bid for a stake in his company as "puzzling" in a letter to shareholders, adding that he wasn't "particularly excited" about the Qatari airline's outreach.

However, in another twist late on Wednesday (2 August), Qatar Airways said it was reversing its decision to build a stake in the US carrier.

"Further review of the proposed financial investment, taking into account the latest public disclosure of American Airlines, has demonstrated that the investment no longer meets our objectives," the airline said.

Following the news, American Airlines shares were down 67c or 1.31% to $50.39 at 6:32pm BST.

Qatar Airways' investment portfolio currently includes a 20% stake in British Airways-owner International Airlines Group along with a 10% stake of South America's LatAm Airlines.