Ryanair has described as “rumour and speculation” reports it has offered to pull a number of Aer Lingus routes if it is allowed to take over the rival airline.
It was claimed last night that Ryanair was holding discussions with the European Commission’s Competition Directorate and was offering to curtail a number of the existing Aer Lingus routes to create more competition.
The RTÉ news report said the routes could then be filled by the likes of British Airways and Virgin.
Within minutes of the report being aired, Ryanair issued a statement in which it said: “Ryanair tonight reconfirmed that it will not comment on the EU process currently under way in relation to its takeover offer for Aer Lingus. Ryanair described this evening’s news reports as rumour and speculation, and Ryanair has no intention on commenting on either.”
In June 2007, the European Commission blocked Ryanair’s first €1.48bn takeover of Aer Lingus.
The commission said its decision on the takeover was not a matter of “never ever”, adding that for another Ryanair bid to be successful, it would have to ensure there were sufficient slots available to allow a newcomer to successfully operate out of Dublin.
At the time Competition Commissioner Neelie Kroes said the merged airlines would have a monopoly of 80% of the flights into and out of Dublin and there would not be sufficient capacity left to allow other companies to compete.
Ms Kroes said the takeover would have led to a monopoly or dominant position on 35 routes carrying 14m passengers to and from Ireland and with no competition on 22 of them. In June of this year, Ryanair made a surprise cash offer to buy out Aer Lingus, just a day after Britain’s Competition Commission began a full investigation into Ryanair’s 29.8% holding in the airline. Ryanair offered €1.30 per share, 10c per share less than it offered in a 2008 takeover bid.
The offer valued the former national airline at approximately €694m.
At the time, Ryanair boss Michael O’Leary said the bid would “allow the Government to deliver the first of its assets sale obligations to the troika”, enabling “Aer Lingus to secure a financially strong, Irish-based, airline partner committed to keeping Aer Lingus as a separate airline”.
Aer Lingus said the offer, “even if it is capable of completion”, undervalued the airline.
Last month, Aer Lingus chief Christoph Müller said he would prefer it if the Government released its 25% stake onto the open market “so that institutional investors could access it”.
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