Ireland-based low-cost carrier (LCC) Ryanair says it will take its fight to the highest court in Europe if necessary, as it again refused Thursday to accept a demand by UK competition authorities to sell down its 29.8% stake in Aer Lingus to 5%.
Ryanair had asked the Competition and Markets Authority (CMA) to reconsider its earlier decision in the light of what it said were materially changed conditions in the marketplace.
The CMA said Thursday, however, that it had decided that no such change had occurred and reiterated its requirement that Ryanair should reduce its shareholding in the Irish flag carrier. Aer Lingus is currently the subject of a takeover bid by IAG, parent group of British Airways and Iberia.
“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,” said Simon Polito, chairman of the CMA Ryanair/Aer Lingus inquiry group.
“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.
“IAG has said that it would not be interested in acquiring any airline with a significant minority investor. The conditional nature of IAG’s bid is consistent with this and our original assessment that Ryanair’s presence was likely to deter other airlines from entering into, pursuing or concluding combinations with Aer Lingus.”
Ryanair disputed the latest CMA finding, in what has become a long-running and acrimonious dispute between the Irish LCC and the UK’s competition authorities.
Ryanair CEO Michael O’Leary described Polito’s claims as false and misleading.
“Ryanair explained that IAG’s offer for Aer Lingus has already received public acceptances from both the Irish government and Etihad who between them own approx. 30% of Aer Lingus. If the IAG offer gets to 50.1%, it is clear that there is nothing Ryanair can do to prevent IAG acquiring control of Aer Lingus. No 30% shareholder can block a takeover bid if more than 50% of other shareholders accept it.
“Both Simon Polito and the CMA are attempting to defend the indefensible. The sole basis for their 2013 divestment decision was…that Ryanair’s minority stake was or would prevent any other airline making a bid for / or acquiring control of Aer Lingus. This bid process … is now in fact taking place.”
Ryanair says it has not received an offer from IAG for its Aer Lingus shares, but will consider any such offer on its merits in the best interests of Ryanair’s shareholders.
Ryanair head of communications Robin Kiely added that the CMA Group is looking into the matter had been unable to establish any consumer harm arising from Ryanair’s minority stake in Aer Lingus
“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.
“We will continue to appeal and will bring our case to Europe if necessary,” Kiely toldATW.