Business Irish

Friday 24 May 2019

Ryanair 'will give up' 50pc of Aer Lingus short haul

Loss-making Flybe to get the services if Brussels agrees bid

Aoife White and John Mulligan

Ryanair would hand over half of Aer Lingus's short-haul business to British airline Flybe if it's allowed to take over its smaller rival.

Under pressure to improve the remedies it will implement if it's allowed by the European Commission to pursue its €694m takeover of Aer Lingus, Ryanair has been busy pulling out the stops to push through the deal.

Speaking in Rome yesterday, Ryanair boss Michael O'Leary insisted that the carrier wouldn't need to appeal a European Commission decision due next month because he's confident the competition tsars will sanction the takeover.

Under Ryanair's latest offer to Brussels, it would hand over about 43 Aer Lingus routes to loss-making Flybe. British Airways would take three that already serve Heathrow.

Ryanair has said it could exit all 46 Dublin routes that overlap with Aer Lingus and that several rival carriers are interested in competing at Irish airports.

IAG in December signed a non-binding agreement to buy landing slots at Heathrow airport from Ryanair if it completes the planned takeover.

Ryanair, Flybe, Aer Lingus and IAG, which owns British Airways, all declined to comment. The European Commission is due to decide by the end of February whether or not it will allow Ryanair to proceed with a planned takeover.

The European Commission's competition directorate has previously indicated that earlier remedies proposed by Ryanair – including a planned sale of Aer Lingus slots at Heathrow – wouldn't be enough to secure the go-ahead for a takeover of its smaller rival.

Objections

It issued Ryanair with a so-called statement of objections in November that outlined shortcomings in the airline's initial planned remedies.

Before Christmas, the Government also said it wasn't willing to sell its 25.1pc stake in Aer Lingus to Ryanair.

But Mr O'Leary said yesterday that would be difficult for the commission to reject the Ryanair proposals.

Ryanair already owns close to 30pc of Aer Lingus.

Aer Lingus chief executive Christoph Mueller and Ryanair deputy chief executive Howard Millar are due to separately speak this morning at a major international air finance conference in Dublin.

Among the topics they'll be exploring is the future of the Irish aviation market.

Ryanair is also due to deliver third-quarter results on Monday.

The airline's passenger growth will slow this year as it reduces the number of shorter flights in some markets due to higher airport charges, said Mr O'Leary.

He said he expects passenger numbers to rise by between 3pc and 4pc to 82.5 million by the end of March 2014.

He predicted that Ryanair's passenger numbers would be largely flat this summer. (Additional reporting by Bloomberg)

Irish Independent

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