Ryanair shares dip as merger rejected
Shares in Ryanair and Aer Lingus experienced differing fortunes in Dublin yesterday after the European Commission rejected a proposed merger of the two Irish airlines.
Ryanair’s shares fell by 0.7 per cent while Aer Lingus’s finished up 0.4 per cent at the close of trading.
This was the second time in six years that the commission had rejected a bid by Ryanair for Aer Lingus.
“I reached the conclusion that this acquisition could not be allowed,” commission vice-president in charge of competition policy Joaquín Almunia said yesterday.
“Indeed it would have directly harmed passengers, who would have had to pay higher fares as a result.”
The commission concluded that on 28 of the 46 routes on which Ryanair and Aer Lingus compete directly, the merger would have led to a monopoly.
There would also have been constraints on the other routes, it added.
Ryanair had proposed hiving off just more than half of Aer Lingus’s short-haul routes to British Airways and Flybe, but the commission said these remedies were “not sufficient given the seriousness of the competition problems at stake”.
Ryanair said the rejection of its offer was a “political decision to pander to the vested interests of the Irish Government . . . and is not one that is based on a fair and reasonable application of EU competition rules”. It said it would appeal the commission’s ruling.
Aer Lingus chief executive Christoph Mueller described Ryanair’s proposed remedies as “inadequate”. Minister for Transport Leo Varadkar said the merger would have been “bad for competition in the Irish aviation market”.