UK Office of Fair Trading is free to probe Ryanair's stake in rival carrier Aer Lingus
RYANAIR has been refused permission by the UK Supreme Court to appeal a decision by a lower court which will allow a probe into the carrier's near 30pc stake in Aer Lingus to proceed.
The UK's Office of Fair Trading (OFT) has been attempting to investigate Ryanair's holding for two nearly two years, but has been thwarted by legal action by the low-cost carrier.
OFT wants to determine whether Ryanair has exerted "material influence" over its rival's strategy and also if its presence on the Aer Lingus share register has resulted in a substantial lessening of competition.
When the OFT initially tried to launch its investigation in 2010, Ryanair insisted that the watchdog was acting too late.
The airline argued that the OFT hadn't launched the probe within a four-month window from when Ryanair first acquired a stake in Aer Lingus in 2006.
Last year, the Competition Appeal Tribunal ruled that the OFT was acting in time. Last week, the UK's Court of Appeal also said that the OFT probe could proceed. It was that decision that Ryanair sought to appeal. Once it has finished its investigation, the OFT will then decide whether or not to refer the case to the UK's Competition Commission.
In 2007, the Competition Commission said that broadcaster Sky should be made reduce its stake in rival ITV. That was appealed, but the UK Court of Appeal confirmed in 2010 that Sky would have to cut its holding.
Aer Lingus welcomed the Supreme Court decision.
"The Supreme Court's decision brings to an end Ryanair's challenge to the validity of the OFT's decision to commence its investigation of Ryanair's holding, which is contrary to the interests of consumers and the majority of Aer Lingus' shareholders," the airline said in a statement yesterday.
Aer Lingus chief executive Christoph Mueller has repeatedly criticised the fact that Ryanair has been allowed to remain a major shareholder in the former state-owned airline.
But Ryanair boss Michael O'Leary has also indicated on numerous occasions that he would be prepared to sell the stake if a suitable offer was made by a buyer. He has also not ruled out offloading the stake to Abu Dhabi-based Etihad, if the Middle East airline decided it wanted to become a significant shareholder in Aer Lingus. Ryanair has already written off virtually its entire investment in Aer Lingus.
Ryanair said yesterday it remained confident that the UK Competition Commission would find it did not have control or exercise influence over Aer Lingus.
"Since Aer Lingus has spent six years ignoring Ryanair's shareholding, this UK OFT investigation is yet another bureaucratic waste of UK taxpayers' funds and resources," a Ryanair spokesman said.