Qatar Airways has bought a 10% stake in the parent company of British Airways in the latest UK investment by the Gulf state.
The move will cement a close commercial relationship between BA and the airline, whose owner, the Qatari government, is a significant investor in Britain.
The state’s investment fund owns Harrods, the Shard skyscraper in central London and stakes in Sainsbury’s, Barclays bank and Heathrow. The airline’s chief executive officer, Akbar Al Baker, already sits on the board of Heathrow where Qatar owns a 20% stake.
Willie Walsh, chief executive of International Airlines Group, the BA owner, said: “We’re delighted to have Qatar Airways, one of the world’s premier airlines, as a long-term supportive shareholder. 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.”
However, BA’s biggest trade union said Qatar Airways’ employment practices, which forbid female staff to marry and allow the termination of contracts for pregnancy, were a cause for alarm.
“Qatar Airways’ treatment of its workforce is cause for serious concern, and is currently subject to a formal complaint to the UN’s international labour organisation. Given the union-initiated progressive work that has taken place at BA to eliminate a number of discriminatory practices, this is an opportunity for IAG to impress upon Qatar the benefits of such an approach.”
The International Transport Workers’ Federation has documented a range of other breaches of rights at the airline, including curfews, surveillance and summary dismissals leading to expulsion from the Gulf. Executives at Barcelona football club, which is sponsored by Qatar Airways, this week said they would be reviewing the deal owing to social conditions in Qatar.
Qatar Airways has described the ITF allegations as inaccurate. A spokesman told the Guardian in a previous response to the claims: “Our contracts are transparent and reflect important safety standards in the aviation industry, and local regulations, and are not dissimilar to other airlines or private-sector companies operating both in the Middle East and beyond.”
BA sponsored Qatar’s entry into the Oneworld airline alliance, and they also have a cargo partnership. Qatar has indicated it would seek to extend ties following the investment, which could include codeshares on flights via the Gulf state – allowing the airlines to sell tickets on each other’s planes.
Baker said: “IAG represents an excellent opportunity to further develop our westwards strategy.”
Qatar Airways is prohibited from owning more than a minority stake in IAG under EU ownership rules and said it does not currently intend to increase its 9.99% shareholding.
IAG was formed by the merger of BA and Iberia in 2011 and has since acquired the Spanish low-cost carrier Vueling. It is pursuing the acquisition of Irish carrier Aer Lingus, whose shareholders include Abu Dhabi-based airline Etihad.
What the Qataris own in Britain
HSBC Tower, the bank’s global headquarters in Canary Wharf
The Shard on the south bank of the Thames (95%)
Harrods, bought in 2010 for a reported £1.5bn
The Olympic Village in east London
Numbers 1-3 Cornwall Terrace, Regent’s Park – this week denied planning permission to be turned into a £200m single home
A 50% stake in the Shell Centre on London’s South Bank
Half of One Hyde Park, the world’s most expensive apartment block
The former US embassy building in Grosvenor Square
The site of Chelsea Barracks in west London, being turned into a luxury housing estate
20% slice of Camden market
Stakes in Barclays, Sainsbury’s, the London Stock Exchange and Heathrow
And coming soon: Canary Wharf, after the controlling group capitulated and recommended a £2.6bn bid to shareholders
Julia Kollewe
