Qatar Airways just made a brilliant move in Europe

REUTERS/Regis Duvignau

In the US, Qatar Airways has taken on its critics — namely Delta — by rubbing salt in their wounds. In Europe, it is taking a different track. The Qatari national airline took boosted its stake in International Airlines Group (IAG) from 15.7% to 20%. IAG is the parent of British Airways and Iberia. 

Qatar, which has been building its ownership in the Anglo-Spanish company, says the move is purely financial.

After all, IAG's shares plunged in the wake of Britain's decision to leave the European Union. 

"The recent market valuation of one of the world's leading airline groups has provided what we believe is an attractive opportunity to increase our shareholding in IAG," Qatar Airways Group Chief Executive Akbar Al Baker said in a statement.

But backing IAG makes sense on a strategic level as well. 

Over the past decade, Qatar Airways along with fellow Middle Eastern airlines Emirates and Etihad have expanded rapidly into the Europe and North America. And lately that expansion has drawn the ire of rivals in Europe and North America.

They've taken to complaining that the three Middle Eastern airlines have received more than $40 billion worth of subsidies.
REUTERS/Regis DuvignauIn the US, the complaints are coming from a group called the Partnership for Open & Fair Skies, which is primarily backed by the three big US carriers. And the situation has devolved into a feud between Qatar and Delta.

The Partnership's European counterpart — Europeans for Fair Competition — is supported by airlines such as Lufthansa Group and Air France-KLM — alleges Qatar has received more than $17 billion in subsidies over the past decade which has resulted in the loss of jobs for European aviation workers. 

Owning a huge stake in one of the biggest carriers in Europe is a great way to undermine any push back from the critics, turning potential adversaries and their governments into allies. IAG also owns Ireland's Aer Lingus as well as Spanish low cost carrier Vueling.

This is a strategy that Abu Dhabi-based Etihad has also undertaken with the creation of its equity partnership network which includes Air Berlin, Alitalia, and Air Serbia. 

In addition to IAG, Qatar also purchased 49% of Italy's Meridana and 10% of South American giant LATAM Airlines Group in July.

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