British Airways owner IAG’s biggest shareholder, Qatar Airways, on Wednesday spent nearly £500 million increasing its stake to 25.1% in a move triggering renewed speculation about its intentions for the group.
The bumper share purchase ups Qatar’s holding from 21.4% and comes just weeks after IAG removed a cap on non-EU shareholders buying more stock.
IAG’s outgoing chairman Willie Walsh put the ban on last February because the company was in danger of breaching EU rules that airlines in member states must not be more than 50% owned by shareholders from outside the union. Brexit meant UK shareholders were now considered non-EU.
Since then, the non-EU shareholders fell to below 40%, allowing IAG to remove the cap a month ago. That paved the way for Qatar’s action today.
Qatar, 100% owned by the state, first invested in IAG in 2015 and has been upping its investment ever since.
It has also been buying stakes in a number of other airlines, from China Southern and Cathay Pacific to Air Italy and South America’s Latam Airlines.
Its investments have not always gone to plan. Air Italy, in which it had a 49% shareholding, went bust last week. Some stakes are seen as strategic moves to position Qatar to gain an advantage in obtaining take-off and landing slots at other carriers’ home airports, but the company says IAG is simply viewed as a cash investment. Speaking of the IAG move, chief executive Akbar Al Baker said: “Our investment to date has been highly successful and the announced increase in our shareholding is evidence of our continued support of IAG and its strategy.
“Qatar Airways continues to consider opportunities to invest in airlines and support management teams that share our vision to enhance travel opportunities for airline passengers across the globe.”
IAG shares gained 8p to 640p.