Ryanair boss hits at takeover decision

Ryanair boss Michael O’Leary today criticised an expected European Commission decision to stop his low-cost airline taking over Ireland’s national carrier Aer Lingus.

The attack came amid growing speculation that the ban will be announced by Brussels tomorrow or next week – the first time for 20 years that the Commission’s competition authorities will have blocked a European airline merger.

Mr O’Leary, speaking in Brussels, said there was no justification for the “unprecedented” decision.

He said: “This is designed to appeal solely to the narrow vested interests of the Irish Government and ignore the benefits to millions of consumers.”

Ryanair’s £1bn (€1.48bn) offer for Aer Lingus immediately attracted a formal Commission monopolies inquiry amid concern about the development of a single dominant air carrier operating at Dublin Airport and stifling competition.

Mr O’Leary pointed out today that the proposed takeover affected less than 5% of the European airline market.

And he insisted he had already guaranteed massive savings for passengers of about £70m (€104m) per year in lower fares and fuel surcharges.

He said if the Commission does announce a block on the takeover, “Aer Lingus passengers should send the bill for their higher fares and fuel surcharges to the European Commission in Brussels”.

Mr O’Leary declared: “The Commission’s decision to prohibit this merger between two EU airlines which between them represent just 5% of European airline traffic is not just unprecedented but, in our view, unlawful.

“We call on the Commission to explain how it can rubber-stamp mergers between larger airlines such as Air France/KLM, Lufthansa/Swiss and Lufthansa/Austrian, when these airlines have bigger positions at their home airports than the combined Ryanair/Aer Lingus share at Dublin Airport.”

Mr O’Leary said the Air France/KLM merger had resulted in significant fare increases – but Ryanair has offered unprecedented reductions which, he said, were guaranteed.

He accused the Commission of targeting Ryanair with a “unique” set of rules which did not mirror the Commission’s approach to airline takeover cases for the last 20 years.

Apart from Aer Lingus, only the Irish Government raised objections to the proposed merger, and last March the Commission set out a “statement of objections” against the move.

Final confirmation that the deal will not be permitted is bound to raise the stakes in the lengthy difficult relationship between Mr O’Leary and EU competition officials.

Today Ryanair claimed any ban was based on an inaccurate analysis of the effects on European airline competition and the competitive position of Dublin Airport.

A Ryanair statement said Brussels was wrong to claim that competing airlines would not enter Dublin Airport if Ryanair took over Aer Lingus – “the case file proves that other competitors have confirmed they will enter Dublin Airport,” said the statement.

The low-cost carrier owns 25% of Aer Lingus and, once the takeover ban is announced, intends to appeal to European judges in Luxembourg.

“The court has overturned several Commission prohibitions and we expect it will do so again in this case,” said Mr O’Leary.

“European consumers should not be denied the lower fare and fuel surcharge savings which will follow from a Ryanair/Aer Lingus merger.

“We are confident that the European Court will overturn this bizarre, illogical, manifestly inaccurate and untenable prohibition.”