3rd Mar 2015 15:15
LONDON (Alliance News) - Ryanair Holdings PLC Tuesday asked the UK antitrust regulator to reconsider a decision requiring Europe's largest low-cost carrier to sell down most of its near 29.9% stake in Irish flag carrier Aer Lingus PLC.
In a submission to the Competition and Markets Authority, Ryanair argued that International Consolidated Airlines Group PLC's bid to acquire Aer Lingus has disproved one of the key reasons behind the regulator's order that Ryanair sell at least 25% of Aer Lingus.
Ryanair built up its stake in Aer Lingus when it previously unsuccessfully tried to acquire its Irish rival. It was blocked several times in its attempts by regulators and by Aer Lingus shareholders including the Irish government.
The CMA's predecessor as UK antitrust regulator, the now closed Competition Commission, then ordered Ryanair to reduce its Aer Lingus stake after concluding that it resulted in substantial lessening of competition in the UK, including preventing Aer Lingus from merging with, or being bought by, other airlines.
"In reaching its conclusion ? now shown to be wrong ? the Competition Commission relied on submissions by International Consolidated Airlines Group SA that it did not propose to acquire Aer Lingus and that it would ?not usually contemplate buying a controlling interest in an airline with a significant ongoing minority shareholder.? The evidence of IAG was especially significant because IAG is one of the three major airline groups in Europe, operates extensively in the UK and Ireland, has substantial resources and network, and is an important competitor to Ryanair," the low-cost carrier said in its submission to the CMA Tuesday.
"The findings in the Final Report have now been contradicted and disproven by events, which demonstrate conclusively that Ryanair?s shareholding in Aer Lingus does not prevent Aer Lingus from merging with, being acquired by, or otherwise entering into combinations with other airlines, and which fatally undermine the lawfulness of the proposed divestment remedy," it added.
IAG has made a EUR1.36 billion takeover offer for Aer Lingus, which the Irish flag carrier's board is supporting. However, the owner of British Airways and Spanish airlines Iberia and Vueling still needs to get the backing of the Irish government if it is to complete a deal. The Irish Ministry of Finance has a 25.17% stake in Aer Lingus.
IAG has been trying to secure the support of the Irish government by promising to protect Aer Lingus' identity and key routes, particularly between Ireland and London Heathrow, if the takeover goes ahead. However, the government has yet to decide whether these guarantees will be enough to get its backing.
"The reaction of the Irish Government to these announcements has confirmed what Ryanair always said (and the Competition Commission dismissed), namely that the Irish Government, and not
Ryanair, represented the only obstacle to Aer Lingus? combination with any other airline," Ryanair said in its submission.
The CMA said that interested parties have until March 17 to respond to Ryanair's submission.
Ryanair shares were down 0.2% at EUR9.93 in London Tuesday afternoon, while Aer Lingus shares were down 16% at EUR2.32. IAG shares were down 2.2% at 561.50 pence.
By Steve McGrath; [email protected]; @stevemcgrath1
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