Friday 20 October 2017

Ryanair claims key evidence 'kept secret' in Aer Lingus stake ruling

Ryanair is appealing the UK ruling requiring the airline to reduce its stake in Aer Lingus to 5pc
Ryanair is appealing the UK ruling requiring the airline to reduce its stake in Aer Lingus to 5pc
John Mulligan

John Mulligan

Ryanair has argued that key evidence used by the UK's Competition Commission to arrive at a decision to force the airline to reduce its stake in Aer Lingus from 29.8pc to 5pc was "kept secret" from the low cost airline.

The allegation is made by Ryanair in its appeal which it has just filed against the watchdog's decision.

The Competition Appeals Tribunal – the first port of call for Ryanair in its efforts to reverse the decision – said the argument forms one of the airline's principal grounds for requesting a review.

"The Commission's procedure was unfair, in that the Commission's case relies upon evidence and allegations that have been kept secret from Ryanair," says the tribunal summarising Ryanair's claims.

"In particular, the Commission withheld evidence that it relies upon to establish that, absent Ryanair's minority shareholding, other airlines would have or would in the foreseeable future enter into combinations with Aer Lingus."

In deciding last month that Ryanair must sell most of its shares in Aer Lingus, the Competition Commission noted that Aer Lingus had been in talks with two other airlines over the past year-and-a-half regarding possible business combinations.

Buyer

The watchdog also said that having Ryanair as a 29.8pc shareholder in Aer Lingus would hinder the latter's chances of sealing a deal with any prospective buyer in the future. Ryanair, headed by chief executive Michael O'Leary, has also insisted that the Competition Commission has no jurisdictional right to probe its Aer Lingus stake. Ryanair has also claimed that the Competition Commission erred in law in failing to show a causal link between the acquisition by Ryanair of material influence over Aer Lingus' policy and the finding of a substantial lessening of competition (SLC).

The commission has found that Ryanair's stake in Aer Lingus has led to a situation where there either is or could be a substantial lessening of competition between the two airlines.

"The Commission's finding that the alleged material influence has led or will lead to an SLC is unsupported by the evidence and unreasonable," Ryanair has argued.

"In particular, the Commission has argued that the alleged material influence could influence Aer Lingus' commercial policy and strategy in certain ways.

However, the Commission has failed to conduct a proper analysis of the various scenarios which it posits."

Ryanair has also insisted that the Commission has no right to make its finding while the airline is appealing a decision made this year by the European Commission that prevented it from pursuing its third takeover attempt of Aer Lingus.

It also says that the order to sell down its stake and the immediate appointment of a trustee to oversee that sale are "disproportionate, in particular in light of Ryanair's willingness to offer effective but less intrusive undertakings".

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