Office of Fair Trading probes Ryanair's stake in Aer Lingus

Michael O'Leary, Ryanair's chief executive, said he was surprised at the OFT's probe into the stake his company amassed as part of an unsuccessful bid to take over Aer Lingus, Ireland's former state airline, four years ago.

O'Leary said the latest inquiry by the OFT involved two non-British companies and that it was also three years since the European Commission investigated and confirmed that Ryanair had no legal or de facto control over Aer Lingus.

"We have asked our lawyers to liaise directly with the OFT to bring this out-of-time and unnecessary query to an early conclusion," O'Leary said.

"Ryanair also calls on the OFT to close these queries without delay, and without wasting time or resources on what is clearly a non-existent issue over which the OFT clearly no longer has any jurisdiction."

It is understood the regulator believes that although listed as Irish companies, both airlines serve customers across the UK.

The OFT said its investigation will initially centre on whether it has jurisdiction under the Enterprise Act 2002 to review the acquisition as a relevant merger situation.

If so, it will then probe whether Ryanair's stake raises competition issues that give rise to a duty to refer the acquisition to the Competition Commission. However Ryanair maintains this must be done within four months of a merger.

Aer Lingus said it welcomed the investigation. A spokeswoman added: "This investigation follows confirmation by the EU General Court in its decision earlier this year that, while the EU Merger Regulation does not give the EU Commission power to address such minority shareholdings, individual member states remain free to apply their national competition law to Ryanair's shareholding.

"Aer Lingus will cooperate in full with the OFT in this investigation."

Stephen Furlong, aviation specialist with Davy Stockbrokers in Dublin, said: "I was surprised by this, and I would be equally surprised to see anything taken forward but again this is legal eagles, so who knows."

The OFT will decide whether to refer its probe to the CC on 24 December.