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Updated at 3.30am
THE UK’S COMPETITION watchdog has ordered Ryanair to sell most of its almost 30% stake in Aer Lingus.
The final warning follows a long-running stand-off between the budget carrier and the body, which says Ryanair needs to reduce its shareholding to 5%.
The airline vowed back in February that it would keep fighting the ruling, after the UK Court of Appeal rejected Ryanair’s bid to overturn it.
A statement from the company at the time cited its “human rights” – while this morning, the carrier has slammed the latest announcement as “ridiculous”.
Ryanair had requested the Competition and Markets Authority re-examine its decision at that point – a year-and-a-half after the original ruling in August 2013. However, an April ruling the CMA provisionally found there was “no material change or special reason” to do so.
That decision has been finalised this morning. A statement on the watchdog’s website said that in light of IAG’s current bid for Aer Lingus “the CMA will ensure that implementation of this remedy interacts effectively with the bid process and the assessment of the bid by the European Commission“.
“IAG’s bid for Aer Lingus is dependent on securing Ryanair’s agreement to sell its shareholding. This recent development illustrates that Ryanair can decide whether a bid for its major competitor on UK/Irish routes succeeds or fails,” Simon Polito, Chairman of the CMA’s Ryanair/Aer Lingus inquiry group said.
“This concern was an important part of our decision to require Ryanair to reduce its shareholding. It’s not good for competition when one company holds such an influence over the future of one of its major competitors.
Although at this point Ryanair has yet to decide whether to sell its shares to IAG, we need to ensure that, whatever happens in relation to this particular transaction, Ryanair’s ability to hold sway over Aer Lingus is removed.
Poloto said it was clear the timing of IAG’s bid had been influenced by the prospect of Ryanair being forced to sell the majority of its shareholding.
Hitting back
In a typically strong-worded statement this morning, Ryanair has described the CMA ruling as “manifestly wrong” and said it “flies in the face of the current IAG offer for Aer Lingus”.
When the only basis for the CMA’s original divestment ruling was that Ryanair’s minority shareholding was or would prevent other airlines making an offer for Aer Lingus, the recent offers by IAG for Aer Lingus totally disprove and undermine the bogus theories and invented evidence on which the CMA based its untenable divestment ruling.
The CMA, Ryanair contend, “were unable to establish any consumer harm arising from Ryanair’s minority stake in Aer Lingus and instead resorted to speculating (in the CMA’s August 2013 report) that Ryanair’s 29.8% shareholding would deter other airlines from merging with or bidding for Aer Lingus”.
“IAG’s current offer for Aer Lingus proves that the the CMA’s invented theory of harm was hopelessly wrong,” the statement continues.
Ryanair has instructed its lawyers to appeal today’s ridiculous decision to the Competition Appeal Tribunal, given that it is factually unsustainable and legally flawed as the IAG offer for Aer Lingus proceeds.
A challenge to the UK Supreme Court is also being worked on, the airline says.
First posted at 9am.
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The original ruling was made using the logic that nobody else would ever come in and takeover aer lingus, the fact that now that has happened and they are still forcing Ryanair to get rid of their shares proves how garbage the original ruling was
I don’t understand competition law and certainly don’t understand how a British court can make a judgement regarding two Irish companies. But it does seem a bit strange in light of iag’s bid for are lingus
The British authority got involved because of the threat of a possibly monopoly on routes from the UK to Ireland. Ryanair being quoted on the London stock exchange may have something to do with it also, but I’m not 100% sure on that point.
Ryanair is floated on the London Stock Exchange, despite being based in Ireland it is under UK jurisdiction
Well, Ryanair have written off the cost of aer Lingus shares,so standby for a bumper profit margin next year, way over €1 billion.
I don’t agree with the ruling either. Seems like a UK court making it easier for a predominantly UK company to take over an irish company and increase the monopoly in Heathrow.
They’re worried about a Ryanair monopoly on the Dublin LHR route, yet they’re perfectly ok with IAG, who also operate the route taking over? Hypocrisy, idiocy and just plain lack of sense. Besides, it’s too irish companies so feck off.
If FR too over EI the monopoly would be on LHR, LGW, STN & LTN. Plus Manchester, Birmingham and other UK routes. IAG taking over doesn’t have the same effect, as FR will still provide lots of competition.
I’d much rather an merger with IAG (who presently only operate about 12 flights a day on the LHR-DUB & LHR-BHD routes than a Ryanair Aer Lingus duopoly with ever soaring air fares and little interlining!
Ryanair should make a bid to take over IAG.
What taxpayers should want is Ryanair to put in another bid for Aer Lingus. €2.60! Start a bidding war. Aer Lingus is easily worth it.
Better return for taxpayers. The government and Aer Lingus could hardly turn down €2.60 a share after agreeing to Willies €2.50!.
I’ll buy it off them for 1 euro to piss AIG off!
Why would AIG be bothered? IAG now I could understand…….
Lol too true
This smells of shiit. They are effectively undervaluing Ryanair share value.
Nothing to stop Ryanair asking for a direct swap of IAG shares in a takeover bid. They would control then control less than 2% of the combined group.
Please explain this to me how can a UK authority be interfering in 2 Irish companies ?. We have an Irish company trying to buy an Irish company and this UK authority has objections too this, yet they don’t seem to have any difficulty with a British company buying out Aer Lingus. As I have said previously this smells of Shiit.
Ryanair is floated on the UK stock exchange so for all intents and purposes is a British company!
You don’t understand business much, do you tony?
A lot more than you give me credit for!
I understand all the loop holes regulators and companies use and abuse to get/interfere in what they want!
I don’t understand how the various European governments have been trying to cockblock Ryanair for so long trying to take over Aer Lingus over competition concerns, and then have absolutely no problem allowing Aer Lingus being sold to another company which will create a monopoly just as bad on many long haul flights.
Ridiculous, they will not create a monopoly on longhaul routes!
The Joint Business Venture in IAG would still only have a marginal market share!
They’ll probably try and sell it off on the Stansted Stock Exchange
IAG will buy Ryanair shares in Aer Lingus big pay day for mick o Leary
UK watchdog should keep out of it – Ryanair should have been given first refusal to buy instead of IAG – IAG will keep their nose clean for a year or two and then they will start downsizing the airline and available routes out of Dublin and especially Shannon – IAG only want Aer Lingus for the Heathrow Slots – nothing more – the price that the government have let it go for is an absolute scandal especially when the aircraft alone were worth that and more – people give out about the fare prices not coming down though fuel prices have – not realising that airlines lock into buying fuel at a set price for a number of years ahead – sometimes they gain (fuel prices rise) sometimes they loose (fuel prices fall) pending on the lock in price they have agreed on -
@Deidre. I expect you’re right. Why else would they be fighting so vigorously for a small airline.
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