31st Aug 2007 16:36
Aer Lingus Group PLC31 August 2007 Aer Lingus Group plc ISE: EIL1 LSE: AERL Aer Lingus rejects Ryanair request for EGM Proposed resolutions would breach EU & Irish Competition Law Dublin & London, 31 August, 2007: Aer Lingus Group plc ("Aer Lingus" or "theCompany"), an Irish low-cost, low-fares airline, providing both short-haul andlong-haul passenger transportation services, today announces that The Board ofDirectors of Aer Lingus has this afternoon officially rejected a request byminority shareholder, Coinside, on behalf of Ryanair, to convene anextraordinary general meeting (EGM) of the Company. The full text of the letterrejecting the request is set out below. Coinside Ltd,C/o Ryanair Head Office,Dublin Airport,Co. Dublin. F.A.O. Mr Ken O'TooleDirector Re: Notice of Requisition of Extraordinary General Meeting of Aer Lingus Dear Sir, We refer to your letter of 13th August, 2007 requisitioning an ExtraordinaryGeneral Meeting ("EGM") of Aer Lingus to consider, and if thought fit to passthe two resolutions set out in your letter. We also refer to the relatedstatement issued by Ryanair on 14th August, 2007 to the Irish Stock Exchange. We have carefully considered your request, but for the reasons set out in detailbelow we are not prepared to accede to it. The context in which your request must be considered is of course the decisionby the European Commission of 27 June 2007 that the acquisition of control byRyanair of its closest competitor, Aer Lingus, would significantly impedeeffective competition in the Common Market and therefore could not be permitted.You are well aware that Aer Lingus and Ryanair are each others' closestcompetitors on routes between Ireland and the UK which are the subject matter ofthe resolutions you have sought. In Ryanair's statement of 14th August 2007, Mr O'Leary, Chief Executive ofRyanair, expressly identified the strategy that Ryanair would wish Aer Lingus topursue, namely to continue to fly from Shannon and to operate Belfast-Gatwickroutes instead of its recently announced Dublin-Gatwick route, on which AerLingus competes with Ryanair, as well as Ryanair's own future commercialstrategy, in respect of a number of markets on which Aer Lingus and Ryanaircurrently compete or potentially compete. Ryanair specifically comments in itsstatement that "competing from Belfast to Gatwick against the relatively highfare Easyjet, will certainly be more profitable for Aer Lingus than competingagainst the much lower fare Ryanair on the Dublin-Gatwick route". Mr O'Learyalso stated Ryanair's wish in the alternative that Aer Lingus reduce frequencyon its London Heathrow routes from Dublin and Cork where it currently competeswith Ryanair. In addition, Mr O'Leary stated that if Aer Lingus decided to continue with itsShannon-Heathrow flights, then Ryanair would suspend its three additional dailyflights to London as "it would not make financial sense for Ryanair to add thesefights in circumstances where Aer Lingus continues to provide capacity for330,000 passengers annually on the Shannon-London route". You will be aware that Irish and European competition law prohibits allagreements and concerted practices between undertakings that have as theirobject or effect the prevention, restriction or distortion of competition. Asyou will also be aware, an infringement of Irish and/or EC competition law givesrise to a criminal offence under Irish law as well as exposing the company tothe threat of civil fines and damages. It is clear that, in calling for an EGM to consider the two resolutions set outin your letter, coupled with the content of the statements made by Ryanair tothe Stock Exchange, Ryanair is attempting to influence and co-ordinate thestrategic conduct of Aer Lingus, its closest competitor, in circumvention of theCommission's recent prohibition decision and in clear breach of Irish andEuropean competition law. In these circumstances and having received legal advice, it is clear that boththe holding of the EGM and the consideration of the proposed resolutions wouldinvolve Aer Lingus and Ryanair in an infringement of Irish and EC competitionlaw, namely, Section 4(1) of the Competition Acts, 2002 and 2006 and Article 81(1) of the EC Treaty, respectively. Consequently, the directors of Aer Lingus reject the request as set out in yourletter of 13th August to convene an EGM and I am directed by the Board of AerLingus to inform you that Aer Lingus will not be convening an EGM for thesepurposes in any circumstances. Yours faithfully. Laurence GourleyCompany SecretaryOn behalf of Aer Lingus Group plc Cc Company Secretary, Ryanair Holdings plc ENDS About Aer Lingus Group plc Aer Lingus is an Irish low-cost, low-fares airline, providing both long-haul andshort-haul passenger transportation services. Aer Lingus' low-cost, low-faresmodel is centred on maintaining low unit cost, offering one-way fares,maintaining effective fleet utilisation and developing the Aer Lingus brand.Consistent with this low-cost model, Aer Lingus' primary distribution channel isits website aerlingus.com. Investors & analysts Irish Media International Media Mark Kenny/Jonathan Neilan Padraig McKeon / Sarah Ryan Rory Godson / Matthew FletcherK Capital Source Drury Communications PowerscourtTel: +353 1 631 5500 Tel: +353 1 260 5000 Tel: +44 207 250 1446Email: +353 87 2312632 (PMK) +44 207 324 0491 (RG)[email protected] +353 87 6767452 (SR) +44 207 324 0494 (MF) +44 7909 926020 (MF) Email: [email protected] Email: [email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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