Ryanair tries to allay fears over competition

RYANAIR HAS received commitments from “multiple airlines” to operate routes currently served only by Ryanair and Aer Lingus in the event of a Ryanair takeover of the former State carrier, Ryanair’s chief executive has said.

After the company’s annual shareholder meeting in Dublin yesterday, Michael O’Leary said this was likely to involve between 29 and 39 routes out of Ireland.

While there are 47 so-called “crossover” routes between the two airlines, eight of these are also served by other competitors.

Ryanair has submitted draft proposals to the European Commission, which will rule on the proposed takeover by January.

The commission rejected a bid by the airline for Aer Lingus in 2007 on competition grounds. In 2009 Ryanair withdrew an offer before it had been considered by the commission. Mr O’Leary said he believed the remedy package submitted by Ryanair to the commission would allay competition concerns. “It goes way beyond any of the recent remedies that they have accepted for previous transactions such as BA-BMI, Air France- KLM or Lufthansa. It involves getting other airlines to come to Dublin and competition on all cross-over routes.”

Asked whether there was an anti-Ryanair bias in Brussels, Mr O’Leary said: “An anti-Ryanair bias would be a bit strong. There is certainly, in Brussels, a latent pro flag-carrier mindset.”

He said Ryanair’s bid for Aer Lingus was “the only significant airline merger blocked in the last six or seven years”.

The Irish Government, a 25 per cent shareholder in Aer Lingus, had been neutral in its response to Ryanair’s takeover bid, he said. “To be fair, I think the Government has taken an independent position on this. We’ve seen no evidence that the Government is lobbying against it – or for it. ”

The board of Aer Lingus has advised shareholders to reject Ryanair’s bid. Last month it said the reasons for prohibition of the latest offer were “even stronger than before”, given that it is Ryanair’s only significant competitor on the vast majority of Irish air routes.

Mr O’Leary said that while the European Commission must make a final decision by January, an earlier decision would be preferable, as it would allow other airlines to take up the routes in time for next year’s summer season.

If Ryanair’s bid is rejected by the commission, Mr O’Leary said Aer Lingus would cease to exist as an independent entity within five years. “If our offer isn’t accepted, I think it is inevitable that Aer Lingus will then get broken up.”

Ryanair had already received approaches from financial institutions interested in buying the airline’s 30 per cent stake in Aer Lingus, Mr O’Leary added.

He also said he had not sent a letter or text message of support to a recent rally in support of Seán Quinn, as had been reported.