Ryanair makes case for buyout

Ryanair chief executive Michael O’Leary has suggested his company could be allowed to buy the remaining stake in rival Aer Lingus that it does not own if that airline were to get into financial difficulty.

The UK Competition Commission is expected to rule that Ryanair should sell all of its 29.8 per cent stake in Aer Lingus later this month, while the European Commission blocked its bid to buy the remaining 70.2 per cent earlier this year.

According to a transcript of a discussion with investment analysts following the publication of its first-quarter results last week, Mr O’Leary said the “situation could change” if Aer Lingus were to get into financial trouble, something he claimed was “inevitable”.

Until that point, the airline boss said, his company was happy to remain as a minority shareholder in Aer Lingus with no control or influence. Mr O’Leary also said Ryanair would participate if Aer Lingus were to have a rights issue, to avoid dilution of its stake.

He said his company did not stand in Aer Lingus’s way in April when it wrote asking if it had any objection to the proposed sale of a slot at Heathrow to British Airways. Ryanair recently announced it would be prepared to sell its stake in Aer Lingus to any other airline that succeeded in getting 50.1 per cent of the firm’s shareholders to accept an offer for it.

It was reacting to the UKCC’s argument that Ryanair’s stake could deter other companies from bidding for Aer Lingus.

This was one of the points the regulator raised following an investigation into how the relationship between the two affected competition on routes between Ireland and Britain.

Price allegation
Separately, Ryanair has described as false a story in Spanish newspaper El Mundo claiming the cost of its flights between Madrid and Santiago de Compostela doubled following last month's train crash in which 79 people lost their lives.

El Mundo carried a report that a Galician couple who had lost relatives booked Madrid-Santiago flights for €471 the morning after the crash through a website called Rumbo. When their confirmations failed to come through, they allegedly contacted the website and were told the cost had increased.

Ryanair has written to the paper seeking a correction. It says it has no record of the passengers booking seats on any of its three Madrid-Santiago flights on the day in question, or of a fare of €471. It points out it sold seats on these flights at €18-€194.Ryanair’s letter states both the €471 initial fare allegedly booked by Rumbo and the €800 quoted by it “were not Ryanair’s fares”.