Emirates's Clark Says Buying Stake in American Makes No Sense
By Stefania Bianchi - Aug 30, 2010 1:18 PM MT
Emirates, the biggest airline by international traffic, said it has no plan to acquire a stake in AMR Corp., denying speculation of a linkup with the parent of American Airlines.
“We certainly wouldn’t be doing that,” Emirates President Tim Clark said in a telephone interview today. “Us buying a stake in AMR? It wouldn’t make sense.”
U.S. law limits foreign ownership of domestic carriers to no more than 25 percent of voting stock. American sat out the two recent big U.S. mergers, as Delta Air Lines Inc. bought Northwest Airlines Corp. in 2008 and UAL Corp.’s United Airlines agreed in May to combine with Continental Airlines Inc.
AMR gained as much as 6.8 percent after Theflyonthewall.com reported that Dubai-based Emirates was in talks with the Justice Department to acquire a 49 percent stake. The shares of Fort Worth, Texas-based AMR rose 13 cents, or 2.2 percent, to $6.17 at 4 p.m. in New York Stock Exchange composite trading.
Roger Frizzell, a spokesman for AMR, declined to comment.
In June, Emirates ordered 32 additional Airbus SAS A380s valued at $11 billion. That order would give the 25-year-old company 70 more superjumbos than any other airline, funneling passengers through its Dubai base in a challenge to network carriers including Deutsche Lufthansa AG, Air France-KLM Group and Singapore Airlines Ltd.
Emirates ranked only 24th among international airlines as recently as 2000, putting it on a par with Sabena SA, the state- owned Belgian carrier that went bust a year later.
In the intervening period the Gulf carrier has achieved a sixfold increase in traffic, overtaking Lufthansa last year to become the biggest carrier on international flights, according to the International Air Transport Association, which counts Air France and KLM as two airlines.
“You’ve got to be careful of market speculation but it’s flattering that people are talking about us,” Clark said.
To contact the reporter on this story: Stefania Bianchi in Dubai at firstname.lastname@example.org