Qatar Airways' investment in American Airlines exposes an astounding level of hypocrisy in the airline business (AAL)

Qatar Airways wants to buy up to 10% of American Airlines.
An analyst says this is evidence that Qatar receives subsidies, something the US airlines have been insisting for years.
Still, even as it demonizes Qatar and its Middle Eastern rivals, American Airlines is a Qatar partner.

Qatar Airways wants to buy a significant stake in American Airlines. American says Qatar expressed interest in acquiring up to 10% of the company, and a Qatar Airways spokesman told Business Insider that it plans to open its investment in American with a 4.75% stake and remain a passive investor.

A deal like this adds a whole new dimension to the simmering hostility between the US's three major legacy carriers their Middle Eastern rivals. To be more specific, the investment exposes an astounding level of hypocrisy of which both parties are guilty.

At the heart of the controversy is the nastiest feud in the airline business.

Over the past few years, Qatar, along with the rest of the ME3, have denied receiving subsidies. Instead, Qatar Airways insists that it operates like any other major private sector business with investors for whom the company must deliver results.

However, its willingness to sink more than $808 million into American in such a turbulent time for the carrier undermines that assertion.

Over the past month, Qatar Airways has been caught in the middle of a diplomatic crisis between the nation of Qatar and its Middle Eastern neighbors. The dispute has resulted in Qatar Airways' expulsion from major markets in the United Arab Emirates, Bahrain, Egypt, and Saudi Arabia.

These countries have also either severely restricted Qatar Airways' access to or outright banned the airline from their airspace. In addition, the Doha-based airline has been dealing with the financial fallout from restrictions on travel and large electronics issued by the US and UK governments earlier this year.

All of this makes the Qatari airline's decision to spend this kind of money out of the ordinary.

"By making this investment at a time the airline is facing such disruption to its business points out that it has access to financial assets beyond what it has just in its own bank account," said Atmosphere Research Group travel industry analyst Henry Harteveldt. "It only strengthens the argument that, at least in Qatar Airways' case, it is a government subsidized airline."

Passengers flying on Qatar Airways transfer onto American Airlines planes once they arrive in the US. Conversely, Qatar Airways' network allows American to expand its international network without the need to spend billions of dollars to buy additional wide-body airliners. The Fort Worth-based carrier has a similar setup with Abu Dhabi's Etihad. In fact, American proudly lists Qatar Airways and Etihad as partner airlines on its website.

American isn't the only one guilty of this. Delta has been the most vocal opponent of the ME3 and yet has been touting its partnerships with Alitalia and Jet Airways — both subsidiaries of the Etihad Aviation Group. United also has a partnership with Jet Airways.

This means that the US3 and its lobbyists were publicly demonizing the ME3 while happily making money off the very same airlines.

"There enough hypocrisy here to fill an A380," Harteveldt added.

What will become of Qatar's investment in American Airlines remains to be seen. However, what it has done is once again remind us that there's always more than meets the eye when its comes to the airline industry.