Call to refer bid to competition authorities

Wed, Jun 20, 2012, 01:00

Trade union Impact has urged the Government to refer Ryanair's bid for control of Aer Lingus to competition authorities.

The union, which represents over 1,600 staff at Aer Lingus, said a takeover by Ryanair would be uncompetitive as it would create a virtual monopoly in commercial flights between Ireland and Britain.

Ryanair yesterday offered €1.30 per share for the 70 per cent of Aer Lingus it does not already own.

The offer is almost 50 per cent higher than the average price of Aer Lingus shares in the last six months, and well ahead of the €1 per share price that Minister for Transport Leo Varadkar previously indicated would be the minimum price acceptable to the Government.

Impact has today written to Mr Varadkar urging him to refer the Ryanair bid to Irish and EU regulatory authorities.

In its letter the union said a possible takeover by Ryanair would inevitably lead to higher prices for consumers. It said a successful bid would also jeopardise inward investment and economic recovery by placing doubt over the future use of Aer Lingus's Heathrow slots.

"In reaching a decision over the future ownership of Aer Lingus, Impact believes that the Irish Government must give full weight the competition issues and the potential impact of any proposed takeover on to the Irish economy and the Irish traveling public," said national secretary Matt Staunton.

Speaking in the Dáil this morning Taoiseach Enda Kenny said the Government has competition concerns over the possible takeover.

However, he added that as the Government only has a minority share in Aer Lingus it has no blocking rights over the bid.

The main opposition parties have also expressed their concern over the takeover bid.

Fianna Fáil’s transport spokesman Timmy Dooley called on the Government to use its shareholding in Aer Lingus to prevent Ryanair from taking control of the airline.

“The existence of Ryanair and Aer Lingus as separate, competing entities has transformed our tourism and business connectivity. Any material change to the separate status of these airlines would inevitably lead to reduced competition, increased fares and less choice,” he said.

Sinn Féin restated its opposition to the sell-off of the State’s 25 per cent share in Aer Lingus and has called on the Minister for Transport to reject the Ryanair offer.

The party's Public Expenditure and Reform Spokeswoman Mary Lou McDonald said Aer Lingus was of strategic importance to the State.

"If Ryanair’s bid is successful Aer Lingus will be run on the basis of an anti-competitive private monopoly," she said.