Ryanair to fight ‘bizarre’ Aer Lingus order

BUDGET airline Ryanair is to appeal against a “bizarre” order from competition regulators to cut its stake in fellow Irish carrier Aer Lingus.

Ryanair CEO Michael O'Leary called the ruling "manifestly wrong". Picture: PA
Ryanair CEO Michael O'Leary called the ruling "manifestly wrong". Picture: PA

The Competition Commission (CC) found that Ryanair’s 29.8 per cent holding in its rival damages competition on routes between Britain and Ireland, and must be slashed to 5 per cent.

Ryanair has held the stake since 2006 and abandoned a third takeover bid for Aer Lingus earlier this year, having been told that the European Commission would reject its €694 million (£598.5m) buyout plan.

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Simon Polito, deputy chairman of the CC, said: “We consider that there is a tension between Ryanair’s position as a competitor and its position as Aer Lingus’s largest shareholder, and that Ryanair has an incentive to weaken its rival’s effectiveness as a competitor.”

However, Ryanair chief executive Michael O’Leary attacked the ruling as “bizarre and manifestly wrong” and said the airline would appeal against the decision in the coming weeks,, opening the prospect of a legal process that analysts said could last years.

He added: “This prejudicial approach to an Irish airline is very disturbing, coming from an English government body that regards itself a model competition authority.”

O’Leary said the CC took no action when British Airways parent company International Airlines Group bought Bmi from Lufthansa last year, and claimed yesterday’s decision “would appear to be a case of one rule for the UK airlines but an invented set of rules for two Irish airlines”.

Aer Lingus chairman Colm Barrington welcomed the CC’s ruling, and said Ryanair’s holding was “contrary to the interests of the approximately 14 million passengers who fly on routes between the island of Ireland and Great Britain”.

Ryanair last month offered to sell its stake in Aer Lingus to any other European airline that made an offer for its rival and secured the backing of 50.1 per cent of shareholders, but analysts said there were “no obvious buyers” for the shares.