Ryanair has said that it will appeal a ruling from the UK’s competition authority to sell down the majority of its near 30pc stake in Aer Lingus.
Earlier today the UK's competition watchdog, the Competition and Markets Authority, issued a final ruling ordering that Ryanair sell down its 29.8pc stake in its rival to just 5pc, saying that its stake distorts competition on routes between the UK and Ireland.
In a statement issued today the company blasted the decision as “ridiculous” and said that it would appeal the ruling.
A Ryanair spokesman said: “Today’s CMA decision is manifestly wrong and flies in the face of the current IAG offer for Aer Lingus.
“When the only basis for the CMA’s original divestment ruling was that Ryanair’s minority shareholding was or would prevent other airlines making an offer for Aer Lingus, the recent offers by IAG for Aer Lingus totally disprove and undermine the evidence on which the CMA based its divestment ruling.
He added: “Ryanair has instructed its lawyers to appeal today's ridiculous decision to the Competition Appeal Tribunal, given that it is factually unsustainable and legally flawed as the IAG offer for Aer Lingus proceeds.
"In parallel, Ryanair’s lawyers are currently seeking permission to appeal the unsustainable 2013 report to the UK Supreme Court.”
The competition regulator had already ruled in April that Ryanair’s stake in Aer Lingus gave it too much control over its primary rival in Ireland.
In February, Ryanair had requested that the CMA re-examine its decision to require it to sell its stake down.
Simon Polito, Chairman of the Ryanair/Aer Lingus inquiry group said in today's CMA ruling that IAG's bid for Aer Lingus was an important part of the body’s decision to require Ryanair to reduce its shareholding.
"This recent development illustrates that Ryanair can decide whether a bid for its major competitor on UK/Irish routes succeeds or fails," he said.
He added: “Although at this point Ryanair has yet to decide whether to sell its shares to IAG, we need to ensure that, whatever happens in relation to this particular transaction, Ryanair’s ability to hold sway over Aer Lingus is removed."
The CMA's predecessor, the Competition Commission, ordered Ryanair in 2013 to reduce its Aer Lingus holding, citing competition concerns. The watchdog had also claimed that because Ryanair was such a big shareholder in Aer Lingus, it was likely to deter other airlines from making a bid to buy Aer Lingus.
Ryanair had claimed the fact that IAG had made an approach to buy Aer Lingus negates a fundamental plank of the CMA decision to make it cut its stake in its smaller rival.
However Mr Polito said that the timing of IAG’s bid had been influenced by the prospect of Ryanair being forced to sell the majority of its shareholding.
"IAG has said that it would not be interested in acquiring any airline with a significant minority investor. The conditional nature of IAG’s bid is consistent with this and our original assessment that Ryanair’s presence was likely to deter other airlines from entering into, pursuing or concluding combinations with Aer Lingus," he said.
He added: "In our view the circumstances of the IAG bid and other issues raised by Ryanair do not amount to a material change in circumstances or special reason not to take action to remedy the substantial lessening of competition identified in our 2013 report."