Belfast Telegraph

Friday 29 August 2014

Ryanair vow on Aer Lingus takeover

Ryanair

Ryanair has vowed to fight in court a rejection by European officials of its renewed takeover bid for rival Aer Lingus.

The airline accused the European Commission (EC) of acting unfairly and failing to apply its own competition rules and precedents to the latest takeover plan.

"We regret that this prohibition is manifestly motivated by narrow political interests rather than competition concerns and we believe that we have strong grounds for appealing and overturning this politically-inspired prohibition," Ryanair spokesman Robin Kiely said. "Accordingly, Ryanair has instructed its legal advisers to prepare a comprehensive appeal against this manifestly unjust prohibition."

The airline said the takeover bid, rejected by the EC on Wednesday, was supported by a historic and unprecedented remedies package. The "radical" bid included two upfront buyers - BA/IAG and Flybe - to take over around half of Aer Lingus's short-haul business.

The takeover plan - a third bid by Michael O'Leary for Aer Lingus - appeared to have been boosted earlier this month when Flybe agreed to fly 43 of Aer Lingus's short-haul routes, easing competition concerns. There had also been a commitment from the IAG airline group to run overlapping Aer Lingus/Ryanair routes between Dublin and London Gatwick to ensure competition.

Ryanair said the EC's decision to block its latest bid was a political one to protect the interests of the Irish Government - which holds a 25% share in Aer Lingus - and not one based on competition rules.

The airline submitted its final package of takeover plans and commitments earlier this month following a series of meetings with European chiefs. It said the package addressed the shortcomings in its previous two failed bids in 2007 and 2012.

Earlier this year, Aer Lingus posted strong 2012 results with operating profit up 41% to 69.1 million euro. The former flag carrier, which was privatised in 2006, maintains that Ryanair is its only significant competitor on most routes in and out of Ireland.

But Ryanair spokesman Mr Kiely said the EC had set back competition and choice in Europe with its latest rejection of the consolidation. He added: "This decision leaves Aer Lingus as a small, isolated airline and leaves the two Irish airlines at the mercy of the Government-owned Dublin Airport monopoly, which continues to increase passenger charges, deliver third-rate services and oversee traffic declines.

"Over the past five years, as Dublin Airport has doubled its passenger charges, its traffic has declined from 24 million to 18 million per annum, while Aer Lingus continues to get smaller as it wet leases short-haul jet aircraft to Virgin to operate new routes from Heathrow to regional UK airports (making no contribution to Irish tourism), rents long-haul aircraft to charter companies outside of Ireland, and transfers more and more of its short-haul routes to smaller, turbo-prop aircraft."

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