EU blocks Ryanair’s third attempt to purchase Aer Lingus

EU anti-trust regulators have blocked a third bid by Ryanair to buy rival Aer Lingus, a ruling that Europe’s biggest low-cost airline called politically motivated and vowed to challenge in court.

Yesterday, the European Commission — which in 2007 vetoed Ryanair’s first takeover bid for Aer Lingus — said Ryanair had not offered sufficient concessions to allay fears about the combined company’s dominance or monopoly on 46 routes.

It said the €694m bid, which was opposed by the Government, could hurt competition and lead to more than 11m passengers paying higher prices for flights.

“For [Irish and European passengers], the acquisition of Aer Lingus by Ryanair would have most likely led to higher fares,” said EU competition commissioner Joaquin Almunia.

Ryanair — which owns 30% of Aer Lingus and has been battling to buy the 75-year-old former flag carrier to strengthen its market position — had promised to divest some of Aer Lingus’s routes off to Flybe and British Airways in an attempt to win over regulators.

Ryanair yesterday described its concessions as unprecedented and rejected the commission’s arguments.

“We believe that we have strong grounds for appealing and overturning this politically-inspired prohibition,” the airline said.

Ryanair’s appeal could scare off other possible strategic investors in Aer Lingus and frustrate the Government’s efforts to divest its 25% stake in Aer Lingus, as part of the country’s €85bn EU/IMF bailout.

The Government has welcomed the commission’s decision.

“The Government’s view very strongly was that we want to see lots of airlines flying in and out of Ireland, lots of competition, and lots of routes,” Transport Minister Leo Varadkar told RTÉ.

“Ryanair spends a lot of time and money in the courts and generally doesn’t get much success from their actions.

“But that’s a decision for them,” he said of Ryanair’s appeal.

Aer Lingus CEO Christoph Mueller said that Ryanair’s appeal was motivated by a desire to derail a probe undertaken by Britain’s Competition Commission into Ryanair’s stake in thecarrier.

— Reuters

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