O’Leary attacks CC Aer Lingus ruling

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The UK Competition Commission has ordered Ryanair to reduce its stake in rival Irish airline Aer Lingus

The CC ruled Ryanair’s 29.8% holding in its rival damages competition on routes between Britain and Ireland, and must be cut to 5%. Ryanair has said it will appeal the decision. 

The Commission determined that Ryanair's minority stake in Aer Lingus allows it to materially influence Aer Lingus' commercial policy and strategy in a way that has been or may be anticompetitive.

In a statement, Ryanair boss Michael O'Leary claimed that the ruling was "bizarre and manifestly wrong".

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

He also argued that the CC took no action when International Airlines Group took over Bmi last year.

The ruling is the result of a lengthy probe and all but ends Ryanair’s attempts to take its rival over. Several bids were blocked earlier by the European Commission.

CC deputy chairman Simon Polito said today, “We consider that there is a tension between Ryanair’s position as a competitor and its position as Aer Lingus’s largest shareholder, and that Ryanair has an incentive to weaken its rival’s effectiveness as a competitor.

Alec Burnside, managing partner of Cadwalader's, and counsel to Aer Lingus, said, "Ryanair's 29.82% shareholding has been used as a Trojan horse against Aer Lingus for the last seven years since the original 2006 bid. It has been the platform for Ryanair's failed rebids for Aer Lingus in 2008 and 2012. The CC has now found that those rebids have harmed competition between the two rivals. The European Commission needs jurisdiction to scrutinise and protect businesses from anti-competitive minority shareholder situations like this one."

Raymond Doherty

 

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