OFT to probe Ryanair's Aer Lingus stake
The UK's Office of Fair Trading (OFT) has referred Ryanair's near 30pc stake in Aer Lingus to the Competition Commission for investigation.
The decision, which was expected, follows nearly two years of legal wrangling as OFT sought to proceed with its own review of Ryanair's holding.
OFT said it had concluded that Ryanair's stake "may give it the ability to exercise material influence over the commercial policy of Aer Lingus". It insisted that there was a "realistic prospect that its stake has resulted or will result in a substantial lessening of competition on a number of Ryanair and/or Aer Lingus routes between the UK and Ireland".
OFT said it was appropriate that the Competition Commission now undertake a more detailed investigation. The results of that are due by November 29, but the probe can be extended by a further eight weeks if necessary.
"We are concerned that Ryanair's shareholding places it in a position to influence the commercial policy and strategy of Aer Lingus in a number of ways that could dampen competition to the disadvantage of UK passengers," said OFT chief economist Amelia Fletcher, who ultimately took the decision to refer the case to the Competition Commission.
Earlier this month, the UK's Supreme Court ruled OFT was free to investigate Ryanair's holding in Aer Lingus and refused Ryanair leave to appeal the decision. OFT's current head, Irishman John Fingleton, is resigning from the role and is set to be replaced by Clive Maxwell.
Aer Lingus chief executive Christoph Mueller welcomed yesterday's decision to refer the case to the Competition Commission.
He said it was "unacceptable" that Ryanair had been permitted to remain on the Aer Lingus share register.
Ryanair chief executive Michael O'Leary said he was confident that the commission would find that since Ryanair had "no control and no influence over Aer Lingus" that the status quo would remain unchanged.