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Dublin: 6 °C Thursday 23 May, 2013

Commission to investigate Ryanair’s Aer Lingus takeover bid

The European Commission said competition between the two airlines has increased since it prohibited Ryanair’s first takeover attempt in 2007.

File photo
File photo
Image: Leon Farrell/Photocall Ireland

THE EUROPEAN COMMISSION today opened an in-depth investigation into Ryanair’s latest offer to take over the Aer Lingus Group due to competition concerns. Last month the airline proposed acquisition of its main competitor on routes in and out of Ireland.

The Commission prohibited Ryanair’s first attempt at a takeover in 2007 again because of competition concerns and a second attempt in 2009 was later withdrawn by the airline.

In a statement Aer Lingus said the number of routes into and out of Ireland on which the two airlines compete has sharply increased since 2007 and “the reasons for prohibition are therefore even stronger than before”.

Ryanair already owns 29.82 per cent of Aer Lingus. This minority shareholding is currently under review by the UK Competition Commission, in particular the effects on competition between the two airlines on routes between Ireland and the UK.

Aer Lingus said the effects of Ryanair’s minority shareholding were “harmful” and contrary to the interests of consumers and the majority of its shareholders.

In accordance with Takeover Rules, Ryanair said its offer lapses and all acceptances of the offer are void but the airline intends to re-bid for Aer Lingus if the Commission clears its offer.

The Commission now has 90 working days to take a decision on whether the proposed transaction would significantly impede effective competition in the European Economic Area (EEA).

Related: “Reject Ryanair”: Aer Lingus in third recommendation to shareholders>
Read: Ryanair stewards detained at Liverpool airport over cigarette ‘smuggling’>

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Comments (18 Comments)

  • Can’t see it being approved…

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  • If this goes through O’Leary will screw us!

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  • Too many people obsessed with a rail link to the airport. It’s 8km from the city centre, buses are the solution. I’m a commuter every week and airport buses in Ireland are less than half the price of the train services in most European airports. Also, it’s important to note direct services to airport on buses are pretty good in Dublin (you don’t have to go city centre to get to airport) and not all European capitals have train services but do run good airports. Most people given the choice between a bus service from their local area (aircoach are great for those they serve) or having to get into city centre and THEN change to a train wouldn’t do it. It’s not a good logic just saying “trains are better” when you’re not trying to connect an airport miles away to a single central station.

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  • I don’t care who buys them as long as the Government sell their stake and also find a buyer for the DAA. I am fed up with their regular threats of Industrial action which upset everyone that regularly flies into and out of Ireland and charges for flights that look competitive until you reach the bottom line. The offer price last week for return flights to London ended up costing me three times the eye catching ad price. As for the DAA and their parking charges…they look more like the cost of a return flight rather than a car space and no decent public transport serving such a major airport.

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  • I may not have been clear enough in my Posting. The overbearing Unions in both organisations believe the State owes them a living and an existence. Ryanair meanwhile just gets on with it and becomes one of the most successful airlines in the world. Don’t get me wrong . I detest Ryanair and the way it treats passengers but just for a moment contract the two. Aer Lingus has limped from crisis to crisis for forty years and has been a political toy thing of successive Fianna Fail Governments for all of that time and that includes the DAA. If you lived in North County Dublin over that period you would need to be blind to the abuses that went on. Indeed that’s the kind of workplace that spawned the delicious Clare Daly and she leaves little doubt as to the need for State ownership of such failed entities.
    The Government share in Aer Lingus is like an umbilical cord that has become infected due to not being severed at an appropriate juncture and the Government needs urgently to don sterile gloves and dust itself with antibiotic powder as it finally separates itself from this and these creatures. They’re ugly and they’re arrogant and they’ve leached us for years. Anything would be better.

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    • But Mick, do you not remember the pre-Ryanair days when Aer Lingus kept prices down and put the passenger first… oh wait! Competition will win through as it always does. If Ryanair get a monopoly on more routes and raise prices, well that’s the market and they’ll be sensitive to getting as much as they can and we can choose to say no or another airline is free to enter the route if they want to do it cheaper.. The fact is even those who refuse to fly Ryanair get cheaper fares on Aer Lingus but act like somehow Ryanair owe them something. Air travel is not glamorous and no I don’t think my ticket should subsidise the clown who can’t print their own boarding card, turn up on time or have a giant overweight bag. The staff of Aer Lingus cared nothing for protecting the consumer in the past and this sudden concern from a management team who say “Ryanair undervalue the airline by offering a 30% PREMIUM on the share price” sum up how thick the entire anti-Ryanair brigade are.

      Yes – Aer Lingus is profitable but if I own shares in it worth 1.07 and Ryanair are offering 1.30 – what exactly is the reason I’m not selling them?

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  • Re the the comment about selling the DAA, besides the debt incurred from building T2, the DAA are a profitable company. Yes they may need to streamline their operation a bit but having worked there myself, in my experience all they are achieving from attempts to make the DAA more like a private enterprise result in contracting out work and reducing the quality of same. More of which would happen should they be privatised, in which case, the end product would be a poorly run airport from an office of managers and every staff member you’d encounter would be a contractor, who for the most part don’t have the same interest in the job they are doing. Therefore whatever passenger experience you enjoy at present will be greatly degraded and you could be assured that the parking would shoot up also!

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    • Jamie Aer Lingus is not profitable if you factor in the necessary monies for aircraft replacement or try to do anything with the black hole in the pension fund. My concern on the latter is that come the next election some idiot Party will offer a correction from the public purse in return for votes and you and I will be paying again. Remember these are the staff that got a chunk of the Airline in FREE shares and can fly all over the world for free for the remainder of their lives and I don’t want anything to do with this cosseted bunch in terms of pensions. The State needs out now.
      On the other hand that other little Fianna Fail employment exchange who charge more to park a car than you would pay for a return flight anywhere in Europe they need to be sold even faster because they run a facility in Terminal One that is so malnourished you would need to fly to Mogadishu to see something as bad. The rents they charge for retail space would make a Landlord in Hong Kong blush.
      The Company known as DAA needs to be sold to a hard nosed organisation that will attract more airlines and bring costs under control while giving us punters some value.

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