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Saturday 20 September 2014

Ryanair 'to face Aer Lingus demand'

Published 25/08/2013 | 15:57

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Ryanair has made three attempts to buy Aer Lingus

Budget airline Ryanair is expected to face an ultimatum from the competition watchdog this week to sell all or part of its stake in Aer Lingus.

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The Competition Commission may demand the carrier sell its 29.8% stake in its Irish rival in a ruling as early as Tuesday, the Sunday Times reported.

In May the watchdog warned an enforced sale could be possible, saying Ryanair's stake potentially distorted the market for flights between Ireland and Britain, adding it was likely to ''weaken its main competitor''.

It said the shareholding could hold Aer Lingus back from remaining competitive by threatening to block any merger or acquisition deals with other airlines.

The Competition Commission said in May: "Ryanair's shareholding obstructs Aer Lingus's ability to merge or combine with another airline to build scale and achieve synergies to remain competitive.

"Passengers on routes between Great Britain and Ireland will benefit from Aer Lingus continuing to compete vigorously with Ryanair and so Aer Lingus needs to be free to take any actions that will strengthen its position in the future."

Ryanair boss Michael O'Leary has vowed to appeal against any final decision that it will have to reduce its stake in Aer Lingus, claiming the initial findings were ''bizarre and manifestly wrong''.

Last month Ryanair offered to sell its stake to any other European airline that makes an offer for Aer Lingus and wins the backing of a majority of Aer Lingus shareholders.

Ryanair has made three attempts to buy Aer Lingus, with its latest bid last summer blocked by the European Commission.

The Competition Commission could not be reached for comment.

Press Association

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