Ryanair again told to cut its Aer Lingus stake to 5% as regulator stands firm
Ryanair has been ordered once again by the UK competition watchdog to slash its stake in arch rival Aer Lingus from 30% to 5%, even though the Irish flag carrier is likely to be taken over by British Airways owner IAG.
The ruling is the latest twist in the battle between Ryanair’s combative chief executive Micahel O’Leary, British Airways’s Willie Walsh and a succession of bosses at Aer Lingus.
The Competition and Markets Authority today said that it saw nor reason to change its original ruling made in August 2013 that Ryanair must cut its stake despite the arrival of the proposed €1.4 billion takeover bid.
It also revealed that IAG told it that it would not normally bid for any airline in which there was a major minority shareholder but had gone for Aer Lingus on the basis that Ryanair would be foprced to cut its stake.
Simon Polito, head of the CMA investigation, said: “Our provisional view is that neither recent events nor the time that has passed since our final report are reasons not to implement the divestment remedy.”
He added: “Without any action to reduce its shareholding, Ryanair would remain a significant hurdle to any merger because it has an incentive as a competitor of Aer Lingus and, by its shareholding, the ability to hinder Aer Lingus from implementing its own commercial strategy.”
Ryanair is still appealing against the original CMA ruling with a decision from the Supreme Court expected within a matter of weeks.
With a formal bid from IAG for Aer Lingus now said to be days away and likely to receive the backing of the airline’s other big shareholder, the Irish government, today’s ruling may well be overtaken by events.
Ryanair told the CMA: “Ryanair’s position is exactly the same as it has been for the past four years: Ryanair will consider any offer for its shareholding in Aer Lingus if the price offered is attractive.”
It said that recent events showed “what Ryanair has always said, namely that the Irish Government, and not Ryanair, represented the only obstacle to Aer Lingus’ combination with any other airline.”
