Regulator May Force Ryanair To Sell Aer Lingus Stake

Ryanair may be forced to sell its stake in Aer Lingus after a provisional ruling by the Competition Commission (CC). The commission has found that Ryanair’s 29.8 per cent shareholding in Aer Lingus, its main competitor, allows it to “block special resolutions by Aer Lingus and to hinder its plans to issue shares and raise capital; it could also prevent its rival from disposing of its valuable slots at Heathrow airport”. Furthermore, it ruled: “Against a background of consolidation in the airline industry, Ryanair’s shareholding obstructs Aer Lingus’s ability to merge or combine with another airline to build scale and achieve synergies to remain competitive.” The commission believes that the public would benefit from greater competition between the pair, particularly on routes between Great Britain and the Republic of Ireland. Ryanair’s Michael O’Leary argued: “This provisional decision by the UK CC is bizarre and manifestly wrong. The CC’s finding that Ryanair’s shareholding obstructs Aer Lingus’ ability to attract other airlines was disproved by Etihad’s purchase of a three per cent stake and the evidence submitted by other large EU airlines, which confirmed that Ryanair’s shareholding was not a barrier to other airlines acquiring a stake in Aer Lingus.”

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