28-Feb-2013 12:27 PM

European Commission blocks Ryanair’s proposal to takeover Aer Lingus

European Commission blocked (27-Feb-2013) Ryanair’s proposal to takeover Aer Lingus, stating the merger would harm consumers through the creation of a dominant company on 46 routes. This included 28 routes on which the merged carrier would have an outright monopoly, 11 routes on which competition would be very low, and seven routes on which Ryanair and Aer Lingus operate alongside other carriers however they still have very high market shares. Ryanair, which currently holds a 30% stake in Aer Lingus, stated it will appeal the Commission’s ruling and said it was a “political decision” bowing to the Irish Government’s interests. Ryanair said, “We believe that we have strong grounds for appealing and overturning this politically-inspired prohibition. We regret that this prohibition is manifestly motivated by narrow political interests rather than competition concerns. Accordingly, Ryanair has instructed its legal advisers to prepare a comprehensive appeal”. Ireland's Government holds a 25% stake in Aer Lingus and opposed Ryanair’s bid to takeover the airline. Aer Lingus CEO Christoph Mueller welcomed the decision and said, "Aer Lingus’s position from the outset has been that Ryanair’s offer should never have been made. The series of inadequate remedy offers presented by Ryanair only underlines the view that Ryanair made its offer without any reasonable belief that it could obtain clearance." The concessions offered by Ryanair included the transfer of 43 Aer Lingus routes to Flybe and three routes to British Airways. The Commission stated, “Flybe was not a suitable purchaser capable of competing sufficiently with the Ryanair/Aer Lingus merged entity” and that “IAG/BA would not constrain the merged entity to a sufficient degree”. Flybe responded to the decision stating it was “disappointed” and believes Ryanair’s proposed remedy “would have afforded credible and robust competition, including new jobs and bases in Ireland”. [more - original PR - Aer Lingus] [more - original PR - European Commission] [more - original PR - European Commission II] [more - original PR - Flybe] [more - original PR - Ryanair] [more - original PR - Ryanair II]

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