The UK's Office of Fair Trading (OFT) is to proceed with a probe into Ryanair's near-30% holding in Aer Lingus after it determined that it remains "in time" to examine the acquisition of the stake in the former state-owned carrier.
The OFT said last October that it had initiated a merger investigation into Ryanair's stake to determine whether the airline had exerted "material influence" over Aer Lingus strategy and if the stake-building had led to a substantial lessening of competition.
However, the OFT had to first determine whether its opportunity to examine the relationship between the two airlines had already expired.
In announcing its decision yesterday, the OFT's director of mergers, Sheldon Mills, said the agency was still "in time" to review Ryanair's minority stake in Aer Lingus, despite the initial takeover approach and stake having been acquired in 2006.
The OFT added it had been unable to act in the matter until the conclusion of appeals of European Commission rulings relating to Ryanair's previous bid for Aer Lingus and its retained holding in the former state-owned carrier.
Had it acted prior to those appeals being concluded, the OFT claimed that there was a risk of "inconsistent outcomes" between any actions taken by the agency and any action that the European courts might have required of the European Commission in relation to the minority stake or the full bid for Aer Lingus.
Ryanair boss Michael O'Leary lashed out at the OFT decision yesterday, saying the airline would appeal the finding to the Competition Appeals Tribunal. He claimed the OFT was engaged in a "wild goose chase".
While listed as Irish firms, both airlines serve customers across the UK.
Aer Lingus currently flies from Belfast International Airport to London Heathrow and European destinations including Spain, Portugal and the Canary Islands.
Ryanair controversially withdrew from Belfast in October 2010 following a long-running row over an runway extension at George Best Belfast City Airport.
Five routes to London Stansted, Liverpool, East Midlands, Bristol and Glasgow Prestwick were axed.
The airline continues to operate services to London Stansted, Liverpool, Birmingham, Glasgow and Faro from City of Derry.