It's war: American Airlines cuts ties with 2 of its biggest rivals in huge airline dispute (AAL)

According to the Fort Worth, Texas-based airline, Etihad and Qatar were both given notice on June 29 of its decision to end code-share flights after the close of business on March 24, 2018.

The cancellation of the agreements, which allow the airlines to sell tickets on one another's flights as if they were their own, comes amid a tense dispute between US airlines and their Middle Eastern rivals over allegations of illegal subsidies.

On Thursday, American confirmed that Qatar Airways intended to continue with its plan to acquire an unsolicited equity stake in the airline.

In a statement, American Airlines wrote:

"In light of our ongoing dispute over the Open Skies agreements, American Airlines notified Etihad Airways and Qatar Airways on June 29 of our decision to terminate our code-share relationships.

"Given the extremely strong public stance that American has taken on the ME3 issue, we have reached the conclusion that the code-sharing relationships between American and these carriers no longer make sense for us. This decision has no material financial impact on American and is an extension of our stance against the illegal subsidies that these carriers receive from their governments.

"We are committed to doing everything we can to continue to support our team members and ensure that there is fair competition between American and the Gulf carriers."

Qatar Airways declined to comment on the matter. However, an Etihad spokesman called American's decision to end the code-share agreement, in place since 2009, "anticompetitive and anti-consumer" in an email to Business Insider.

The Etihad spokesman said the airline's six daily flights to the US "in no way threaten American Airlines, which, together with its regional partner American Eagle, operates 6,700 flights daily to 350 destinations in 50 countries." He added that the Abu Dhabi, United Arab Emirates-based airline was "committed to the US market and American consumers" and was "taking all possible measures to ensure that the flying public is not harmed by this decision."

However, American's decision to end the code-share agreements with Etihad and Qatar doesn't mean an end to their business relationships. Vinay Bhaskara, a senior business analyst at Airways, believes the decision is mostly posturing by American in support of its employees.

According to Etihad, its interline relationship with American remains intact, which means its passengers can continue to fly on American's aircraft and vice versa. Qatar Airways and American's relationship is closer and more contentious.

The interline agreement between American and Qatar Airways is also firmly in place through their membership in the Oneworld airline alliance. On top of its pending equity stake in American, Qatar Airways owns 20% of IAG — one of American's closest partners.

Code shares allow American to sell tickets on flights operated by another airline using an AA flight number so American's passengers can enjoy the same frequent-flier miles and perks, such as priority boarding, that they would on one of the airline's own flights.

On the other hand, an interline relationship allows passengers and luggage from one airline to flow seamlessly to another. For instance, this allows Qatar Airways to sell flights fly from Doha, Qatar, to Charlotte, North Carolina, by transferring its passengers to an American Airlines flight in Philadelphia or Chicago.