EC asked to stop Aer Lingus takeover

THE Government has asked the European Commission to prevent Ryanair taking over Aer Lingus but has admitted that although they had considered the possibility of such a takeover, they were taken by surprise when it happened.

Transport Minister Martin Cullen said the Government was committed to having two independent airlines in Ireland and they would make their case forcefully in Brussels next week.

Given the size of the two airlines, any takeover of Aer Lingus by Ryanair can only proceed if the European Competition Commissioner Neelie Kroes agrees that it conforms to EU competition rules.

At the preliminary meeting next week, Department of Transport officials will set out the Irish Government position on the hostile takeover attempt.

“We will put forward our views that competition in Ireland is not served by having a new monopoly,” Mr Cullen said.

This was not an issue of the government favouring one airline over the other but of ensuring that both Aer Lingus and Ryanair remained strong, he said.

The opposition has attacked Mr Cullen and Finance Minister Brian Cowan for not being prepared for the Ryanair attempt and for undervaluing Aer Lingus at its flotation, especially having spent over e30 million on consultants.

Mr Cullen denied the allegations, saying the share’s behaviour after the stock exchange launch proved the opening price was pitched correctly.

He added that the Government would not sell its 25.1% Aer Lingus shares.

The State holds 28.3% and has said it will not allow that to drop below 25.1% that ensures another company cannot acquire the 75% required to force delisting.