Saturday 21 April 2018

O'Leary attacks UK watchdog's decision to force Ryanair to sell most of 29.8pc Aer Lingus stake as 'false and irrational'

Ryanair's chief Michael O'Leary
Ryanair's chief Michael O'Leary
John Mulligan

John Mulligan

Ryanair chief executive Michael O'Leary has launched a scathing attack on the UK's Competition and Markets Authority (CMA) for its attempt to force the airline to sell most of its stake in Aer Lingus.

He has described the CMA decision as "manifestly absurd" and insisted the determination is "irrational, hopelessly wrong and contrary to the real world evidence".

Aer Lingus lawyers have told the CMA that a trustee who will be appointed to sell Ryanair's Aer Lingus shares can now, if necessary, "play its part in facilitating IAG's pending bid approach to Aer Lingus".

Last month, the CMA said it has provisionally upheld a 2013 ruling it made ordering Ryanair to cut its stake in Aer Lingus to no more than 5pc.

The CMA's predecessor made the 2013 order on foot of competition concerns, and also because it believed that Ryanair's presence as a significant minority shareholder in Aer Lingus might put other airlines off making a takeover bid for the smaller airline.

In February, the UK Court of Appeal upheld the CMA decision, but last month Ryanair asked the competition authority to reassess its 2013 order because, the airline claimed, there had been a material change in circumstances in that IAG had made a takeover approach for Aer Lingus.

Ryanair has claimed the fact IAG has made an approach to buy Aer Lingus negates a core plank of the CMA reasoning for forcing Ryanair to reduce its stake in its smaller rival.

In a letter this week to the CMA, Mr O'Leary said that the watchdog's 2013 decision is now "hopelessly wrong".

He added: "The CMA's original invented claim that Ryanair's shareholding continues to prevent potential airline partners from approaching Aer Lingus, is now proven to be false and irrational in light of IAG's proposed takeover bid for Aer Lingus."

IAG has previously indicated that it wants an irrevocable undertaking from both the Government, which owns 25.1pc of Aer Lingus, and Ryanair, that both sides will sell their Aer Lingus stakes to IAG before it makes a formal offer to buy Aer Lingus.

While Ryanair has said that it will pursue an appeal of the Court of Appeal decision made earlier this month, lawyers for Aer Lingus have told the CMA that a decision by the UK's Supreme Court on whether or not that appeal will be allowed might not be made until late June or even July.

The Aer Lingus lawyers have urged the CMA to proceed "at the earliest opportunity" to force Ryanair to cut its stake in its smaller rival.

"The fundamental flaw in Ryanair's arguments remains unchanged," the lawyers argue. "It refuses to engage with the inconvenient fact that IAG's interest in Aer Lingus is conditional on Ryanair's exit."

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