7-Jul-2010 10:34 AM

Ryanair loses appeal on acquisition of Aer Lingus; allowed to maintain shareholding

European Commission welcomed (06-Jul-2010) the judgment of the EU General Court dismissing Ryanair's appeal against its decision of Jun-2007 that prohibited the acquisition of Aer Lingus by Ryanair. The General Court confirmed the EC's conclusion that the proposed merger would have significantly impeded competition on 35 routes to/from Ireland. In a separate ruling, the General Court also rejected an appeal by Aer Lingus against the EC's decision with respect to Ryanair's minority shareholding in Aer Lingus. Aer Lingus had argued that the EC should have also ordered Ryanair to divest its remaining minority shareholding, at the time, of 25.17%. [more]

Ryanair, commenting on the ruling, stated it welcomed the Court's confirmation of the EC's 2007 decision that it cannot force Ryanair to sell its 29.8% shareholding in Aer Lingus Group, adding that it is currently studying the details of the judgment (RTTNews/Reuters, 06-Jul-2010). CEO, Michael O'Leary, added that the ruling will "not prevent Ryanair making a future offer for Aer Lingus, but obviously any such offer will have to take account of the court's detailed ruling". Mr O'Leary said: "Ryanair has no immediate plans to make a third offer for Aer Lingus, which in any event would be unlikely to succeed unless the Irish Government decides to sell its 25% stake." He added that Aer Lingus has become "a small peripheral regional airline" and its long-term financial viability "can only be secured as part of one strong Irish airline group". Aer Lingus Chairman, Colm Barrington, meanwhile, stated: "Today's rejection by the European Court of Ryanair's appeal confirms that a takeover of Aer Lingus by Ryanair would harm consumers and lead to higher prices on Irish routes."

European Commission: “The combination of Ryanair and Aer Lingus would have created a dominant position on 35 routes to the detriment of more than 14 million EU passengers that travel to and from Ireland each year. I am happy that the Commission's approach to airline mergers which can hurt citizens has been confirmed by the Court,” Joaquín Almunia, VP in charge of Competition Policy. Source: Company Statement, 06-Jul-2010.

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