IAG share price: Concerns mount over Qatar Airways’ stake in BA parent

on May 23, 2016
Updated: Oct 21, 2019

Qatar Airways’ move to hike its stake in British Airways parent International Consolidated Airlines (LON:IAG) has prompted concerns, The Telegraph has revealed. The news comes after the Gulf airline recently unveiled that it had raised its holding in the FTSE 100 company, which also owns Iberia, Aer Lingus and Vueling, to over 15 percent.

IAG’s share price has jumped this morning, having gained 1.03 percent to stand at 521.84p as of 10:12 BST, and outperforming the broader London market, with the benchmark FTSE 100 index 0.07 percent better off at 6,160.85 points. The group’s shares have lost nearly four percent over the past year, and are down some 14 percent in the year-to-date.
Industry sources told The Telegraph over the weekend that IAG was watching state-backed carrier Qatar Airways closely amid growing speculation that Qatar could ‘comfortably’ push for a board seat at the London-listed company. The Gulf airline disclosed last week that it had increased its stake in the British Airways parent to 15.01 percent, having first acquired a near 10-percent holding in the company in January last year.

“For a FTSE 100 stock with no major shareholders, that’s a very serious number,” one source commented, as quoted by the newspaper. “If they wanted to get [a board seat], it would be pretty straightforward.” Another source believes that the Doha-based carrier would now start ‘agitating’ for board representation at IAG.
The Gulf carrier has signalled that it is considering raising its stake in the British Airways parent further. The company, however, is limited to owning less than 50 percent of IAG under EU rules which prevent non-European shareholders from controlling EU airlines.
The Telegraph noted that irrespective of whether Qatar Airways requests board representation, increased influence at IAG could raise concerns about the Gulf state’s grip on British aviation, with Qatar Holding, part of the Gulf state’s sovereign wealth fund, holding a 20-percent stake in Heathrow.
As of 10:45 BST, Monday, 23 May, International Consolidated Airlines Grp share price is 520.25p.