independent

Wednesday 16 April 2014

Almunia says Ryanair bid talks 'not at critical stage'

EU competition watchdogs are "not yet at a critical stage" in determining whether or not they'll let Ryanair proceed with its latest efforts to take over Aer Lingus, according to Commissioner Joaquin Almunia.

Ryanair tabled its third offer to buy Aer Lingus in a deal that would value its smaller rival at €694m. Ryanair already owns nearly 30pc of Aer Lingus and the European Commission has previously rebuffed an earlier attempt to buy the former state-owned carrier.

But Ryanair boss Michael O'Leary said that the airline had proposed "revolutionary" remedies this time around that he insists should be sufficient in order to secure approval from Brussels for a takeover. Ryanair would still have to persuade Aer Lingus shareholders to agree to a deal.

EU Competition Commissioner Mr Almunia's office has been liaising with a small Ryanair team in the past few months as the airline tries to persuade mandarins that it should be allowed to buy Aer Lingus.

"They are not yet at the critical stage," said Mr Almunia. A final decision isn't due until February 6.

Last month, the commission issued Ryanair with a so-called statement of objections detailing issues it had concerns about despite the remedies proposed by the airline.

The watchdog hasn't been swayed by Ryanair claims that a merger of the two airlines would yield efficiency gains that would, in turn, be passed on to consumers in the form of lower prices and better services.

Ryanair has also proposed surrendering some valuable Aer Lingus take-off and landing slots at Heathrow Airport if it's permitted to proceed with a takeover.

It has sounded out interest from other airlines including British Airways and Virgin.

But the EU's statement of objections deemed the measures so unsatisfactory that it didn't even ask other airlines for their opinion of them.

Michael O'Leary again predicted this week that Aer Lingus would be broken up if Ryanair failed to buy it this time around.

Irish Independent

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