Minister backs UK order for Ryanair stake cut

Transport Minister Paschal Donohoe has backed a UK competition authority decision ordering Ryanair to sell down its 30% stake in Aer Lingus due to the State airline’s potential takeover by the International Airlines Group.

Minister backs UK order for Ryanair stake cut

The senior cabinet member made the comments as he insisted the sale saga will be “brought to a definitive conclusion one way or the other” in the coming weeks, despite admitting a valuation of the lucrative Heathrow slots has yet to take place.

At a press briefing to mark the one-millionth customer of the Government’s Leap card transport service, the Fine Gael TD said he is supportive of the UK’s Competition and Markets Authority’s decision to force Ryanair to sell down its 30% stake by at least 25%.

While the ruling was first made in 2013 to ensure competition among airlines for the benefit of customers, Ryanair had argued the Aer Lingus board’s decision to accept the €1.36bn IAG bid showed the Michael O Leary-led group’s shareholding was not an issue.

However, in a provisional verdict yesterday, the UK authority said Ryanair must still sell down its shares — a decision the airline’s spokesperson, Robin Kiely, said is “manifestly wrong”, based on “bogus theories”.

While Mr Kiely said a final decision will be made next month, he said Ryanair is likely to appeal to the UK supreme court. However, despite the threat, Mr Donohoe said he supports the ruling.

“The cause of this review from the competition and mergers authority was the contention by Ryanair that the bid by IAG constituted a material change in circumstances.

“What the commission have stated is that it does not. I know that in the proposed buy from IAG, it was made clear their bid was contingent on Ryanair selling its share,” Mr Donohoe said.

“The Government view of Aer Lingus and its future of is that we believe it is very important that you have continued competition on key routes for our country. We believe the IAG bid did not constitute a change of circumstance on that.”

The Transport Minister rejected reports he has already received a report on the sale of Aer Lingus from an inter-departmental group set up to examine the issue.

He said the document will be provided to him in the near future, and the issue will be resolved “one way or the other” within “weeks”, but he followed a consistent pattern by declining to give a specific timeline for any decision as discussions remain “very fluid”.

“I have maintained since a number of weeks ago that this is a matter that should be brought to a conclusion soon. That it is a very big decision for our country and a matter of huge importance to Aer Lingus and this is a matter that I will be bringing a recommendation on to cabinet in the coming weeks.

“I am not going to say what week or what date it will be. This is a very fluid matter, as the events of today have demonstrated. But it is a matter that I will be bringing to conclusion soon,” he said.

The Fine Gael TD declined to comment on whether any specific stumbling blocks remain within Government, but confirmed a valuation of the lucrative Heathrow slots, called for by Labour TDs, has yet to take place.

He said the issue, along with other matters, will be included in a detailed inter-departmental report which he will bring to cabinet in the coming weeks.

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