Qatar Airways takes 10% stake in BA-owner IAG

Qatar Airways on Friday snapped up almost 10 percent of IAG, parent of British Airways and Spanish carrier Iberia, in the second European entry by a Gulf carrier.
"As part of efforts to enhance operations and strengthen existing commercial ties... Qatar Airways has acquired a 9.99 percent stake in IAG," the company said in a statement.
The airline's chief executive, Akbar al-Baker, said International Airlines Group "represents an excellent opportunity to further develop our westwards strategy."
The stake is worth an estimated £1.1 billion ($1.65 billion, 1.46 billion euros).
The move represents something of a U-turn for Qatar Airways, as Baker has publicly criticised European carriers, saying earlier this month that they "cannot keep up" with competition from Gulf carriers.
In November, Baker took a swipe at flag carriers, accusing them of being "inefficient" and protected by EU policies.
The three Gulf carriers -- Qatar Airways, Emirates and Etihad -- have snatched a sizable share of the long-haul sector, turning their home cities into major hubs on routes to Asia-Pacific destinations.
Qatar Airways noted EU rules would not let it take a majority stake.
"Qatar Airways may consider increasing its stake further over time although this is not currently intended to exceed 9.99 percent," it added.
IAG chief executive Willie Walsh expressed delight at having Qatar Airways "as a long term supportive shareholder".
He added in a company statement: "We will talk to them about what opportunities exist to work more closely together and further IAG's ambitions as the leading global airline group."
IAG meanwhile is hoping to buy Irish airline Aer Lingus, which this week backed a 1.35 billion euro ($1.53 billion) takeover bid.
The move by Qatar Airways follows Abu Dhabi's Etihad taking last year a 49-percent stake in Alitalia, effectively rescuing the struggling Italian company.
"While Gulf peer Etihad has been busy buying up stakes in smaller European and Asian operators to help feed long haul traffic, Qatar has bided its time and made a decisive move in where it sees the best returns," said Nomura transport analyst James Hollins.
"Despite Qatar having exceptionally deep pockets fuelled by extensive natural gas income, we remind investors that a foreign entity cannot own more than 50 percent of a European airline, although we concur with Qatar’s owners that IAG is a sound investment."
In Friday afternoon deals, IAG's share price was down 1.24 percent at 557 pence on London's FTSE 100 index of leading companies, which shed 0.17 percent to 6,798.73 points.