UK court to rule on Ryanair stake in Aer Lingus
Both sides are expected to appeal if verdict goes against them
British court of appeal judgment could have ramifications for IAG €1.36 billion approach to buy Aer Lingus, as Ryanair is the biggest shareholder in its fellow Irish carrier. Photograph: Andy Rain/EPA
Britain’s court of appeal will rule next week on Ryanair’s challenge to an order by the country’s competition regulator that it cut its 29.8 per cent stake in rival Aer Lingus to 5 per cent.
The judgment could have ramifications for International Consolidated Airlines’ Group’s (IAG) €1.36 billion approach to buy Aer Lingus, as Ryanair is the biggest shareholder in its fellow Irish carrier.
The court of appeal heard Ryanair’s case against a 2013 UK Competition and Markets’ Authority ruling that it reduce its stake in Aer Lingus over three days late last year. A verdict was expected shortly before Christmas.
Court lists show that it is now scheduled to rule on the case next Thursday, February 12th. Both sides are expected to appeal if the verdict goes against them.
When the authority issued its original finding almost two years ago, Ryanair pledged that it would exhaust every avenue of appeal if necessary.
IAG said last week that its €2.55-a-share bid for Aer Lingus would be conditional on getting the backing of both Ryanair and Minister for Finance Michael Noonan, who is responsible for the State’s 25.1 per cent stake.
Ryanair chief executive Michael O’Leary has said that his company’s board would consider any offer it receives for its stake in Aer Lingus “very carefully”.
The IAG approach values the 29.8 per cent holding at nearly €400 million. Mr O’Leary recently told journalists that price would not be an “over-riding” concern and added that the figure was “not a lot of money” in the context of Ryanair.
O’Leary also argued recently that IAG’s attempts to buy the airline “blow completely out of the water” the authority’s contention that the Ryanair stake in Aer Lingus was deterring other potential bidders for the carrier.
Meanwhile, it has emerged that one of the groups considering legal action against Aer Lingus and the State over the recent settlement of an insolvent aviation industry pension, is not now going to sue.
An organisation representing deferred members of the Irish Airline Staff Superannuation pension scheme recently wrote to members saying that while the settlement was unfair to them, it was not against the law.
“Unfortunately, while the actions of the employers were very obviously unfair, they did not act against the law,” the Deferred IASS committee told members. “The courts could not rectify the absence of protective legislation – only Government can do this, and they refused to act to protect deferred pensioners.”
The salary-linked pension scheme had a €750 million shortfall. Part of the deal involved transferring members to a defined contribution plan, into which Aer Lingus and the Dublin Airport Authority committed to putting €260 million in seed capital.
However, the deferred members – that is, the former workers from both companies who have yet to reach retirement age – argued that the plan discriminated against them and could cut their pension payments by up to half.