independent

Wednesday 16 April 2014

O’Leary brands inquiry into airline stake ‘a joke’

Ryanair CEO Michael O'Leary

Ryanair chief Michael O’Leary claims that the ongoing probe carried out by the UK Competition Commission is based on “three completely fictitious arguments as to what might happen”, according to a UK national.

The regulator is currently investigating whether Ryanair’s stake in Aer Lingus constitutes a “substantial lessening of competition” – despite the ruling by the European Commission that competition between the two Irish airlines has increased.

Provisional findings by the UK Commission at the end of May indicate that Ryanair's shareholding is detrimental to Aer Lingus's ability to merge or combine with another airline to build scale and achieve synergies to remain competitive.

In an interview with The Daily Telegraph, O’Leary airs his frustrations at the review and pledges to appeal the decision to the European Court of Human Rights if he is set to lose his stake in Aer Lingus, which stands at roughly 30 percent.

Nonetheless, in a letter to Aer Lingus from Ryanair’s CFO Howard Millar, commitment has been given that a rights issue would not be blocked. Furthermore, O’Leary says he is willing to negotiate on the sale of his sale and is not interested in blocking bids from potential stakeholders – if the situation arises.

 “If we are forced to sell down, we’ll struggle to find a buyer because there is none,” insists O’Leary.

“They say the reason nobody wants to buy is because Ryanair is sitting on Aer Lingus’s share register. No. It’s because they can’t compete with Ryanair in our home market.”

Originally set for publishing mid-July, the Commission has extended the deadline of the report until early September.  The regulator has commented that this delay is not unusual given the intricacies of the investigation but O’ Leary claims: “It’s so they can retire to the shires for the summer and find some evidence, because they haven’t got any.”

A spokesperson from Aer Lingus says: “We believe the effects of the Ryanair minority shareholding to be anti-competitive and we look forward to the findings of the UK Competition Commission’s investigation.”

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