Qatar Airways plans to buy up to 10 per cent of Latam Airlines' shares through a capital increase as the Gulf carrier continues its acquisition prowl.
The Chile-based airline is seeking to hold an extraordinary shareholders meeting by September 2 to propose the US$613 million capital increase at $10 a share, the two carriers said on Tuesday.
Qatar Airways’ investment foray into South America follows its acquisition of a 15 per cent stake in IAG Group, the parent company of British Airways and the Spanish carrier Iberia.
“As a leading airline in Latin America and key member of Oneworld, this investment provides potential opportunities for Qatar Airways’ global network, alongside our successful investment in IAG,” said Akbar Al Baker, the chief executive of Qatar Airways.
Qatar Airways, the second biggest Gulf airline in terms of passengers, is also considering acquiring a 25 to 49 per cent stake in the Moroccan flag carrier, Royal Air Maroc.
Mr Al Baker envisions turning the Casablanca base of Royal Air Maroc into a hub that connects north and west Africa.
“Qatar’s investment strategy is to invest in airlines which complement its own network development and which it regards as well managed,” said John Strickland, the aviation consultant. “Latam is the largest grouping in Latin America and complements Qatar’s plans to develop into this continent.”
Will Horton, the senior analyst at the Centre for Aviation (Capa) consultancy, said the stake gives further indications of Qatar’s global ambitions.
“The investment might help Qatar grow in markets where Latam has a presence. This includes new routes – maybe Lima, with Santiago already announced – and strengthening Qatar’s presence in São Paulo and Rio. But it is not clear an equity investment would be necessary to facilitate this partnership,” Mr Horton said.
Etihad Airways, the third-largest Gulf airline in terms of passenger numbers, has minority stakes in seven airlines, including India's Jet Airways, Air Serbia and Alitalia.
Qatar Airways reported for the first time its financial results on Monday. The airline’s net profit increased more than four-fold to 1.6 billion Qatari riyals (Dh1.6bn) in the financial year that ended in March as the airline cut costs and expanded routes.
dalsaadi@thenational.ae
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