European Commission intends to block Aer Lingus takeover

The European Commission has told Ryanair it will reject the airline's attempt to take over Aer Lingus, Ryanair said in a statement.
Ryanair described the decision as "political" and said it would launch an appeal in European courts.
In a statement, Ryanair said it was notified this morning at a "state of play" meeting with the EU Commission that the Commission intends to prohibit its offer for Aer Lingus.

However, the European Commission said a final decision had not yet been taken on the matter.

The airline said the move came despite the fact that it had met every competition concern raised in the EU's statement of objections and during the review process.

It said this included providing the EU with irrevocable commitments from two upfront buyers to eliminate all competitive overlaps between Ryanair and Aer Lingus.

Ryanair said that IAG had committed that it would take over divestments of Ryanair's and Aer Lingus' entire London-Gatwick operations, and Flybe has committed to take over 43 Aer Lingus UK and European routes.

"Given that the EU Commission recently approved IAG's acquisition of BMI at London-Heathrow on the basis of three-year commitments, the EU's claim that it could not be satisfied of IAG's and Flybe's commitments to these Irish routes after three years is another example of the EU holding Ryanair to a much higher standard than any other EU airline," the airline said in a statement.

In a statement this afternoon, Aer Lingus said it has not received any notification from the EC of its intention to stop the Ryanair takeover bid.

But it said that it was - and remains - the airline's position that the Ryanair offer should never have been made.

It noted that Ryanair's first takeover attempt was prohibited in 2007 on competition grounds.

"Aer Lingus is a much stronger airline today than it was at the time of the previous Ryanair offers and is Ryanair’s only significant competitor on the vast majority of Irish air routes. The number of routes into and out of Ireland on which Aer Lingus and Ryanair compete has sharply increased since 2007,'' it added.

"The Commission will take a decision in this case at the end of February or the beginning of March," a spokesman for EU competition chief Joaquin Almunia said, declining to comment further on the Ryanair statement.

Minister for Transport Leo Varadkar noted Ryanair's statement and reiterated the Government's opinion of the airline's bid for Aer Lingus.

"As I have stated before, the Ryanair remedies package as reported has not satisfied the Government’s concerns about connectivity, competition or employment", he said.

"I do not wish to make further comment until the European Commission has formally made its decision."

In a statement, Flybe said it is disappointed by today's news and will await the outcome of the appeal process Ryanair referred to in its statement

"The proposed transaction with Ryanair to transfer a number of aircraft and operating routes to Flybe is contingent upon the EC's approval of Ryanair's proposed remedies and a successful bid by Ryanair for Aer Lingus," the UK-based airline said.

See how the airline's share prices fared today.
Chambers Ireland calls on EC to reject Ryanair bid
Earlier, Chambers Ireland called on the European Commission to reject Ryanair's proposal to increase its stake in Aer Lingus.

The call came following a Chambers Ireland submission to the European Commission on the proposal.

Chambers Ireland said that it is vital that Ireland's connectivity with Europe and beyond remains intact due to the fact that Ireland is an island economy reliant on foreign direct investment and exports.

Chambers Ireland Chief Executive Ian Talbot said: "Any merger between Ryanair and Aer Lingus would be anti-competitive and bad for Irish business.

"In any industry competition is vital and Irish and international business users should have choice between a range of airlines, standards and services, including cargo handling from service providers committed to Ireland in the long-term."

The group said it was also worried about Aer Lingus' Heathrow slots.

"A Ryanair takeover raises major concerns regarding the future of these vital slots and long term access for Irish business users," cautioned Seán Murphy from Chambers Ireland Air Transport Users Council.

A column in today's Financial Times noted that Aer Lingus shares now top Ryanair's earlier bid price, partly due to its "effective peformance".

The Lex column said that Aer Lingus should be allowed to continue delivering on that good performance.