Ryanair’s bid for Aer Lingus ‘to be blocked’

Ryanair expects the European Commission to block its bid to take over Aer Lingus this week.

The no-frills carrier was responding to what it described as Commission leaks indicating that its offer for the Irish flag carrier will be blocked.

Ryanair, which owns 25% of Aer Lingus, will lodge an appeal to the European Court of First Instance, and seek to have the expected ruling overturned.

The budget airline also confirmed that it will oppose any attempt by the Commission to require it to dispose of its stake in Aer Lingus.

Chief executive Michael O’Leary, speaking in Brussels, said: “The European Commission’s decision to prohibit this merger between two EU airlines which between them represent just 5% of European airline traffic is not just unprecedented, but in our view unlawful.

“We call on the Commission to explain how it can rubber stamp mergers between larger airlines such as Air France/KLM, Lufthansa/Swiss and Lufthansa/Austrian, when these airlines have bigger positions at their home airports than the combined Ryanair/Aer Lingus share at Dublin Airport.

“Whereas the Air France/KLM merger, resulted in significant fare increases, Ryanair has offered unprecedented remedies which include over €100 million p.a. of guaranteed fare and fuel surcharge reductions. It is obvious that the Commission is applying a unique and unprecedented set of rules in the Ryanair/Aer Lingus case.”

He added: “Air Berlin recently completed the acquisition of Deutsche BA and LTU in Germany. Both of these takeovers were approved by the German Competition Authority with minimal remedies, despite the fact that they led to higher fares and fuel surcharges for DBA and LTU passengers.

“Similarly Flybe has recently acquired BA Connect from British Airways under a merger whereby British Airways acquired a 15% stake in Flybe, the UK’s second largest low fares airline. Yet again the UK Office of Fair Trading approved this merger with very minimal remedies.

“It is surprising that the only airline merger in Europe over the past 20 years which has been prohibited is this proposed Ryanair/Aer Lingus takeover.

“The only difference with this merger is the opposition of the Irish Government and one can only conclude that the European Commission’s decision to prohibit is a political one to appease the Irish Government rather than advance the interests of Aer Lingus’s consumers and European competitiveness generally.”

by Phil Davies

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