The markets seem decidedly underwhelmed at the news that Qatar Airways this morning became the biggest shareholder in International Consolidated Airlines Group (IAG). Shares in the British Airways owner slipped 1.1% to 557.5p on the announcement that the Middle-eastern carrier had acquired a 9.99% stake.

Qatar already has a working relationship with IAG through codeshare agreements as well as the airlines' membership of the oneworld alliance.

In a statement from the Doha-headquartered flag carrier, the prospect of upping its holding further was also raised; 'Qatar Airways may consider increasing its stake further over time although this is not currently intended to exceed 9.99%'. How much more the Qataris can hold is likely to be governed by European regulations which stipulate that non-EU shareholders of IAG are subject to an overall cap on non-EU ownership as a result of the requirement for EU airlines to be majority owned by EU shareholders.


Qatar Airways CEO Akbar Al Baker says that the IAG represented an excellent opportunity for the airline to develop its Westwards strategy. 'Having joined the oneworld alliance it makes sense for us to work more closely together in the near term and we look forward to forging a long term relationship,' he says.

Not to be outdone, IAG's chief executive Willie Walsh also professed himself delighted at the prospect of having Qatar as a long term supportive shareholder.

Meanwhile, IAG's £1 billion bid for Irish airline Aer Lingus (AERL) is being weighed up and an Irish parliamentary transport committee was told yesterday that selling Aer Lingus to IAG would have a devastating effect on the country’s economy and connectivity. The board of Aer Lingus has already said it is willing to recommend to shareholders that they accept the offer which values the company at €2.55 per share. The Government holds a 25.11% stake in the airline and IAG's latest offer would put the value of that stake at about €340 million.

Issue Date: 30 Jan 2015