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American Airlines, Qatar Airways Bury the Hatchet via New Deal

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American Airlines Group (AAL - Free Report) ended its dispute with Qatar Airways when it announced the decision to renew its codeshare partnership with the Gulf carrier. The deal will, however, have to be approved by the authorities in Qatar as well as the United States before it becomes effective.

On materialization, the pact between the carriers will boost connectivity between United States and Qatar. Further, in a bid to widen travel options to its customers, American Airlines will place its code on select Qatar Airways’ nonstop and connecting flights to/from the United States and the latter’s hub in Doha.

Similarly, Qatar Airways will place its code on select flights of American Airlines. Notably, a codeshare deal allows sharing of flights, which implies that a passenger has the free will to avail of any flight operated by either of the companies under the agreement, irrespective of the flight number. Notably, management at Zacks Rank #3 (Hold) American Airlines stated that it will also start exploring the option of flight operations between the United States and Doha once the codeshare deal takes effect.

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The above developments mark a major step toward ending the feud between the two carriers.

A Flashback

The dispute started in 2015 when American Airlines along with United Airlines Holdings (UAL - Free Report) and Delta Air Lines (DAL - Free Report) complained to the U.S. government that the massive subsidies and other benefits enjoyed by the three state-owned carriers , namely Qatar Airways, Etihad Airways and Emirates were unfair in nature as that denies a level playing field to the U.S. carriers.

Moreover, in 2017, Qatar Airways announced its intention to buy a 10% stake in American Airlines. However, the offer did not get a favorable response from the Fort Worth, TX-based carrier with its CEO Doug Parker finding the Gulf carrier’s overture “puzzling” and said that the move "makes no sense" amid the then prevailing tensions between the Gulf carriers and their U.S. counterparts.

Subsequently, Qatar Airways ended its efforts to buy a share in American Airlines. Also, as a fallout of the conflict the carriers ended their codesharing deal in 2017.

American Airlines on a Deal-Signing Spree

The renewal of the codeshare partnership with Qatar Airways is not the only deal to be inked by American Airlines. This U.S. based carrier has been signing various deals of late in a bid to bolster connectivity and widen its network.

For instance, earlier this month, American Airlines entered into a codeshare agreement with Brazilian carrier GOL Linhas (GOL - Free Report) . Also, it recently announced a new partnership with Alaska Airlines to broaden the travel choice for West Coast passengers.

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