American Airlines ending code share agreements with two Gulf airlines

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Airbus A380-800, manufactured by Airbus SAS and operated by Qatar Airways and Etihad Airways.

American Airlines said Wednesday it is ending its code share agreements with Etihad Airways and Qatar Airways over an ongoing dispute about Gulf states’ support for the carriers.

The airline said the decision would not have a material financial impact and “is an extension of our stance against the illegal subsidies that these carriers receive from their governments.”

American and two other U.S. carriers argue that Gulf states are unfairly subsidizing state-owned carriers, driving down prices and crowding out competition on key routes, accusations those carriers deny.

The decision comes soon after Qatar Airways said it wanted to buy up to a 10 percent stake in American.

Etihad Airways is a flag carrier and the second-largest airline of the United Arab Emirates, based in Abu Dhabi. Qatar Airways is the state-owned flag carrier of Qatar.

Here is American’s full statement:

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 codeshare relationships. Given the extremely strong public stance that American has taken on the ME3 issue, we have reached the conclusion that the codesharing 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.

CNBC’s Phil LeBeau contributed to this report.