Belfast Telegraph

UK Website Of The Year

Ryanair boss slams shares ruling

Published 11/06/2015

Ryanair said the CMA ruling for it to sell its 29.8% stake in Aer Lingus is 'manifestly wrong'
Ryanair said the CMA ruling for it to sell its 29.8% stake in Aer Lingus is 'manifestly wrong'

Ryanair chief Michael O'Leary has accused the UK's competition watchdog of "false and misleading" claims over a controversial 1.4 billion euro takeover attempt at rival Aer Lingus.

The Competition and Markets Authority (CMA) today issued a "final order" to the no-frills carrier to slash its 30% stake in Aer Lingus to just 5%.

The watchdog claims the holding is anti-competitive and allows Ryanair to "hold sway" over its rival's future.

British Airways owner International Airlines Group (IAG) is currently trying to buy out Aer Lingus, in a move backed by the government two weeks ago.

Mr O'Leary said the fact IAG has already bid for the Irish State's 25% shareholding "has blown out of the water" the CMA stance, who he accused of "attempting to defend the indefensible".

He said: "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 - which the CMA contended 'could not take place' - is now in fact taking place, but Mr (Simon) Polito and the CMA have again moved the goal posts to argue that Ryanair can somehow block an IAG bid for Aer Lingus from succeeding when it is patently clear that as a 29% shareholder, Ryanair cannot prevent IAG acquiring control of Aer Lingus."

Mr Polito, who headed up the CMA's investigation into the shareholding, insists the IAG bid 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," he 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."

He added: "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."

Mr Polito said the CMA will work closely with other authorities to ensure Ryanair reduces its stake in Aer Lingus.

Ryanair has rubbished the finding as "ridiculous" and vowed to mount a two-pronged appeal against the watchdog.

Robin Kiely, Ryanair spokesman, said the airline has instructed lawyers to take its case to the Competition Appeal Tribunal as well as the UK Supreme Court.

"Today's CMA decision rejecting Ryanair's request to review its order to divest Ryanair's 29.8% minority stake in Aer Lingus is manifestly wrong and flies in the face of the current IAG offer for Aer Lingus," he said.

"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."

Mr Kiely claimed the authority was unable to establish any "consumer harm" arising from Ryanair's minority stake in Aer Lingus and instead resorted to "speculating" that would deter other airlines from merging with or bidding for Aer Lingus.

" IAG's current offer for Aer Lingus proves that the CMA's invented theory of harm was hopelessly wrong, and is now unsustainable given that the circumstances have manifestly changed, and accordingly the divestment remedy must be revoked in light of this compelling evidence," he said.

But the CMA said it would ensure its ruling "interacts effectively" with the IAG takeover bid.

Last month, the parliament voted in favour of selling off the State's 25% share in Aer Lingus, clearing another hurdle for the controversial takeover deal which has been trenchantly attacked by Opposition parties.

Aer Lingus said it has noted the CMA's latest decision.

Ryanair said the ruling has not changed its position in relation to the IAG takeover bid, repeating that it has not yet received any formal bid for its shares and would consider it in the best interests of its shareholders.

Your Comments

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting? customercare@belfasttelegraph.co.uk

Read More

From Belfast Telegraph