Ryanair lobbies rivals to compete on routes
RYANAIR IS seeking regulatory approval for its proposed take-over of Aer Lingus by asking at least six airlines to operate alternative services on some of the Irish flag carrier’s routes.
Ryanair has approached Air France-KLM, easyJet, Etihad Airways, Flybe, International Airlines Group and Virgin Atlantic, asking them to consider providing competition on routes to and from Dublin where the two Irish carriers are the leading or only providers.
However, in a sign that Ryanair could find it difficult to secure regulatory approval because its proposed Aer Lingus takeover risks a substantial reduction in competition, some of these six airlines have expressed limited or no interest in operating services to Ireland. Ryanair declined to comment, as did the six airlines it has approached.
It has previosuly been reported that Ryanair had made informal approaches to airlines, including BA and Virgin Atlantic, about taking up some of Aer Lingus’s Heathrow take–off and landing slots, in an effort to address competition concerns.
The European Commission is tomorrow expected to launch an in-depth investigation into what is Ryanair’s third offer for Aer Lingus, five years after prohibiting its first bid. A Phase II inquiry will put any decision back by over three months.
Brussels raised concerns in 2007 at how, following a Ryanair takeover of Aer Lingus, the combined entity would have a monopoly or dominant position on 35 routes out of Dublin, Shannon and Cork airports that went to European destinations ranging from Alicante to Warsaw.
It concluded that Ryanair’s offer to relinquish airport take-off and landing slots, to facilitate competition on these 35 routes, was inadequate because no rival airlines appeared likely to operate alternative services.
Ryanair, which has a 29.8 per cent stake in Aer Lingus, is seeking to avoid a repetition of the commission’s 2007 objections by demonstrating that other airlines would operate routes where the two Irish carriers have overlapping services.
Ryanair in June offered €1.30 per Aer Lingus share, valuing the carrier’s equity at €694 million. – (Copyright The Financial Times Limited 2012)