Ryanair challenges UK ruling on stake in rival

Ryanair has challenged a decision by the UK antitrust regulator ordering it to slash its stake in Aer Lingus to no more than 5%.

Ryanair is appealing the UK Competition Commission’s August ruling on the grounds there is no basis in law for it have to have come to its decision, and that the procedure was flawed, David Pannick, a lawyer representing Ryanair said on the first day of the three-day hearing at the London Competition Appeals Tribunal.

Ryanair’s 29.8% holding in its competitor, valued at about €249m, affects Aer Lingus’s policy and strategy, the Competition Commission said in a report published in August ordering the low-cost carrier to cut its stake in Aer Lingus.

“For the Competition Commission to implement the divestment decision would conflict with EU law,” Mr Pannick said. Ryanair is appealing the regulator’s decision on six grounds.

Europe’s largest low-cost carrier has done battle with competition authorities in Europe since it first bought Aer Lingus shares as part of a takeover bid in 2006.

Ryanair chief executive Michael O’Leary’s most recent offer for the smaller rival was blocked in February 2013 by the European Union, which ruled it would increase fares and reduce choice.

A European court is scheduled to decide on whether the European Commission was “correct in law” to block Ryanair’s bid for Aer Lingus, Mr Pannick said.

“If Ryanair is compelled to sell” its stake by the regulator “it is going to be far more difficult for Ryanair to acquire 100% of Aer Lingus, if permitted to do so”, Mr Pannick told the three-judge panel.

— Bloomberg