Ryanair’s bid to keep stake in rival suffers blow

Ryanair has been dealt a fresh blow in its battle to control the future direction of its shareholding in Aer Lingus.

While, as expected, the British Court of Appeal yesterday upheld a previous UK Competition Commission —now, the Competition and Markets Authority (CMA) —ruling ordering the airline to lower its near 30% stake in Aer Lingus to just 5%; it did not grant Ryanair the right to appeal the decision to the Supreme Court in London.

Ryanair has always said that if yesterday’s ruling went against it, it would appeal the decision. And it reiterated that line yesterday, saying the CMA order was based on “fanciful hypotheses, secretive evidence and unsubstantiated assumptions”.

“As such, we have instructed our lawyers to appeal this ruling to the UK Supreme Court,” it added.

However, Ryanair will actually have to seek permission — from the Supreme Court — for a fresh appeal; a process which, in itself, could take between two and three months and potentially drag the entire process out for the guts of this year.

It also wants the CMA to conduct a formal review of its original findings. Part of the CMA’s ruling was based on the idea that Ryanair’s 29.8% shareholding in Aer Lingus could deter other suitors from attempting to buy the former flag carrier. However, Ryanair has said that IAG’s approach for Aer Lingus has disproved that notion.

“Clearly, IAG’s recent offers demonstrate that the CMA’s findings were wrong and that its divestment remedies must be revoked in light of this compelling evidence,” Ryanair said yesterday.

Any failed Supreme Court appeal could see the forced sale of Ryanair’s interest in Aer Lingus and the CMA force a carved-up sale of the stake.

There currently exist certain restrictions, via an interim order, on Ryanair selling its stake even if it received an offer in the meantime, and the airline would have to seek approval from the Authority. The irony of a truncated forced sale could see a number of other aviation groups gain shareholdings in Aer Lingus.

Ryanair’s chief marketing officer, Kenny Jacobs, yesterday said that the budget airline was still taking a “wait and see” approach regarding the current talk surrounding Aer Lingus, but has still not received any offer (for its stake) from IAG, nor is expecting to meet with IAG chief Willie Walsh during his visit to Dublin this week.

Mr Jacobs said that Aer Lingus is not of great interest to Ryanair anymore, and called the current debate over its sale “a sideshow”, adding that Ryanair is only focused on continuing its growth. To that end, the airline launched two new routes out of Dublin yesterday — to Copenhagen and Polish city Lublin — as part of its winter 2015 schedule; saying it will grow its customer base out of Dublin Airport by 14%, per year, to almost 10m passengers.

With regard to current movement around Aer Lingus, Mr Jacobs said Ryanair would encourage the Government to be sensible in evaluating an offer and to, ultimately, make a decision that would give Aer Lingus a viable future.

For its part, Aer Lingus yesterday welcomed the UK Court of Appeal ruling regarding Ryanair’s shareholding.

Ryanair’s share price fell 3.6%, in Dublin yesterday to €9.73. Aer Lingus was up by over 3.1% at €2.25.