"Further review of the proposed financial investment, taking into account the latest public disclosure of American Airlines, has demonstrated that the investment no longer meets our objectives", the airline said in a statement on Wednesday.
Qatar said in June that it planned to buy an initial stake of up to 4.75 percent of American's stock, but Fort Worth, Texas-based American said Qatar's goal was to get a 10 percent stake.
The airline released a statement Wednesday saying it had reversed its decision on the investment: "Qatar Airways has taken the decision not to proceed with its proposed passive financial investment in American Airlines".
It was an odd move.
On July 13, American Airlines announced its decision to no longer share flights with Qatar Airways as part of its push against government subsidies of Middle East carriers.
Akbar Al Baker, Group Chief Executive, Qatar Airways, said, "The Asian market is very important for us, so we are very pleased to be able to increase our flights to Ho Chi Minh City, Hanoi and Krabi".
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"We have witnessed significant growing demand between South America to Qatar and beyond".
Qatar Airways began flying to Brazil in 2010 with a service between Doha and São Paulo which continued onwards to Buenos Aires, Argentina.
Parker vowed that despite the prospect of Qatar becoming a large shareholder, American would continue to fight Qatar, Emirates and Etihad Airways over the allegations of unfair government subsidies.
However, in another twist late on Wednesday (2 August), Qatar Airways said it was reversing its decision to build a stake in the USA carrier. He said American "couldn't be more excited to keep our focus" on serving customers.
"Qatar Airways will continue to investigate alternative investment opportunities in the United States of America and elsewhere that do meet our objectives", added the airliner.