Inquiry into Ryanair Aer Lingus stake

Tue, Jun 19, 2012, 01:00

Ryanair is facing a full investigation of its 30 per cent stake in Aer Lingus after a regulator in Britain said the holding may lead to higher prices.

Britain's competition commission said yesterday it will investigate the six-year-old minority share deal after it was flagged for review by Britain’s Office of Fair Trading (OFT). The stake gives Ryanair the ability to weaken Aer Lingus as a competitor and stifle investments from other airlines, the OFT said last week.

The Competition Commission will decide by November 29th “whether the acquisition may be expected to result in a substantial lessening of competition in any market” in Britain, the London-based watchdog said in a statement.

Ryanair has been fighting with regulators over the stake since it acquired the shares in 2006 as part of a takeover bid that was ultimately blocked by the European Union. The airlines carry more than 80 per cent of the 370,000 passengers that travel between the UK and Ireland each month, the OFT said.

“We do not believe that this is a sensible or useful expenditure of U.K. taxpayers’ monies or resources,” Ryanair chief executive Michael O’Leary said in a statement last week. The same comment applies today, the company said.

Aer Lingus supports the review, the carrier’s chief executive Christoph Mueller, said in a statement last week.

The UK Court of Appeal ruled June 1st that Ryanair did not have the right to challenge a lower court ruling that the OFT was entitled to seek a full probe from the Competition Commission, which is the UK’s “second-phase” antitrust watchdog.

Ryanair’s Stephen McNamara described the OFT investigation as “yet another bureaucratic waste of UK taxpayers’ funds and resources”.

Bloomberg