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Published on Wednesday, August 28, 2013

Ryanair ordered to cut Aer Lingus shareholding



Ryanair said today that it will continue to fight to hold on to its 29.8% stake in rival Aer Lingus despite a final ruling from the UK Competition Commission that the shareholding could be detrimental to passengers flying between the UK and Ireland.


The UK Competition Commission report, published today, said Ryanair's seven-year-old minority shareholding in Aer Lingus should be cut to 5%.


Confirming its provisional ruling announced earlier this year, the Commission  said Ryanair's stake "had led or may be expected to lead to a substantial lessening of competition between the airlines on routes between Great Britain and Ireland".


Ryanair said the claim was "baseless" and that it contradicted a ruling in February by the European Commission which found that "The competitive relationship between Ryanair and Aer Lingus has at least persisted, if not increased, since 2007".


The Competition Commission rejected Ryanair's offer to sell its minority stake to any other airline that makes a bid for Aer Lingus and obtains acceptances from 50.1% of Aer Lingus' shareholders and its offer to dispose of Aer Lingus' Heathrow slots.


Ryanair boss Michael O'Leary said: "This report by the UKCC is bizarre and manifestly wrong but also entirely expected.  From the first meeting with the UKCC it has been clear to us that Simon Polito's (the Competition Commission deputy chairman) and Roger Davis' minds had been made up in advance and no truth or evidence was going to get in the way of their story. 


"This prejudicial approach to an Irish airline is very disturbing, coming from an English government body that regards itself a model competition authority.


"In February 2013 the European Commission found that competition between Ryanair and Aer Lingus has "intensified" since 2007.  The UKCC's failure to accept this finding is a breach of its legal duty of sincere cooperation between the UK and the EU competition authorities and will form the basis for Ryanair's appeal against this bizarre and manifestly unsound ruling, which our lawyers will lodge with the Competition Appeal Tribunal in the coming weeks."


Aer Lingus chairman Colm Barrington said: "The Competition Commission should be commended on its thorough investigation."


He added: "It was unacceptable that our principal competitor was allowed to remain on our share register with a shareholding of 29.8% and interfere with our business despite the European Commission blocking both Ryanair's first hostile takeover attempt six years ago and its most recent hostile takeover attempt earlier this year."


 

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