Calls for European Commission to investigate Aer Lingus takeover bid

GOVERNMENT and opposition MEPs have called on the European Commission to investigate the attempted e1.4 billion takeover of Aer Lingus by Ryanair.

They claimed such a deal would jeopardise the US/Ireland aviation agreement that allows Aer Lingus to fly into various American airports.

Fianna Fáil’s Sean O’Neachtain and Brian Crowley and Jim Mitchell of Fine Gael have written to Competition Commissioner Neelie Kroes objecting to the bid by Europe’s biggest low-cost flyer for the Irish national airline.

Given the total turnover of the two companies, the Commission has a right to investigate the bid and prevent it if necessary. The Government and Aer Lingus workers are opposed to the bid.

Mr O’Neachtain, who is a member of the parliament’s transport committee pointed out that if Ryanair were to take over Aer Lingus, between 80-90% of all passenger traffic between the Republic of Ireland and Britain would be controlled by one air carrier resulting in no competition on the routes.

He also pointed out that under the US/Ireland bilateral aviation agreement 51% of shares in Irish airlines operating between the two countries must be owned by Irish shareholders.

If Ryanair were to take over Aer Lingus Mr O’Neachtain questioned whether the majority of their shareholders were Irish. “This whole issue is of a very serious concern to many people in Ireland,” he said.

He was supported in his view by South MEP Brian Crowley, leader of the Fianna Fáil group in the Parliament. “If Ryanair were to takeover Aer Lingus this would reduce competition, which would be bad news for consumers and bad news for Ireland,” he said.

The Commission should look at the effect such a merger would have on the Irish market as they did in relation to the French and Dutch markets due to the Air France takeover of KLM, he said.

“The Commission decided the deal could go ahead but that Air France had to withdraw from the Dutch market and other markets in Europe because of the potential monopoly position it would have in the provision of air services,” he said.

Gay Mitchell, who is a member of the parliament’s Economic and Monetary Affairs Committee has also written to Ms Kroes asking her to investigate the bid to ensure the competition rules are fully observed. “A Ryanair takeover of Aer Lingus, just like an Aer Lingus takeover of Ryanair, could be the antithesis of competition and would be a disaster for Ireland,” he said.

A spokesperson for the commissioner said there is little they can do at this early stage of the takeover attempt.

Aer Lingus has asked its financial adviser Goldman Sachs to prepare a defence to the Ryanair takeover.