independent

Saturday 19 April 2014

Airline sets out stall knowing rivals will not buy shareholding

RYANAIR is a past master at spin and getting its message across, so you have to cast a cold eye over its latest claim.

Its offer to sell its 29pc shareholding is contingent upon another EU airline making a bid for Aer Lingus.

There are no obvious ready buyers for the airline and analysts believe there is little likelihood that one will come out of the woodwork soon.

Ryanair's stock exchange statement offering to sell its stake in Aer Lingus is a bold attempt to deflect criticism from the UK's competition authority that its shareholding is detrimental to the commercial policy and strategy of the former Irish flag carrier.

Ryanair spokesman Robin Kiely branded the Competition Commission's (CC) concerns as bogus. The CC is expected to come out with a judgment next month or in September stating that Ryanair must sell all or at least some of its stake in its smaller rival.

Ryanair doesn't like to be caught on the back foot, so it appears to be setting out its stall first and making the argument that there is no need for the airline, as it sees it, to get rid of its stake. Analysts seem to be taking the offer to sell with a pinch of salt.

Goodbody Stockbrokers believes nothing has changed, and the offer simply gives the airline the ammunition needed to appeal a potential negative CC judgment.

"Ryanair is just getting in ahead of time to say we're setting out our stall to say whatever arguments you put forward we believe are inaccurate," said airlines analyst Donal O'Neill.

Irish Independent

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