Ryanair says EC intends to block Aer Lingus deal

The European Commission has told Ryanair it will reject the airline's attempt to take over Aer Lingus, Ryanair said in a statement.

Ryanair described the decision as "political" and said it would launch an appeal in European courts.

In a statement, Ryanair said it was notified this morning at a "state of play" meeting with the EU Commission that the Commission intends to prohibit its offer for Aer Lingus. 

However, the European Commission said a final decision had not yet been taken on the matter.

The airline said the move came despite the fact that it had met every competition concern raised in the EU's statement of objections and during the review process.

It said this included providing the EU with irrevocable commitments from two upfront buyers to eliminate all competitive overlaps between Ryanair and Aer Lingus.

Ryanair said that IAG had committed that it would take over divestments of Ryanair's and Aer Lingus' entire London-Gatwick operations, and Flybe has committed to take over 43 Aer Lingus UK and European routes.

"Given that the EU Commission recently approved IAG's acquisition of BMI at London-Heathrow on the basis of three-year commitments, the EU's claim that it could not be satisfied of IAG's and Flybe's commitments to these Irish routes after three years is another example of the EU holding Ryanair to a much higher standard than any other EU airline," the airline said in a statement.

In a statement this afternoon, Aer Lingus said it has not received any notification from the EC of its intention to stop the Ryanair takeover bid.

But it said that it was - and remains - the airline's position that the Ryanair offer should never have been made.

It noted that Ryanair's first takeover attempt was prohibited in 2007 on competition grounds.

''Aer Lingus is a much stronger airline today than it was at the time of the previous Ryanair offers and is Ryanair's only significant competitor on the vast majority of Irish air routes. The number of routes into and out of Ireland on which Aer Lingus and Ryanair compete has sharply increased since 2007,'' it added.

"The Commission will take a decision in this case at the end of February or the beginning of March," a spokesman for EU competition chief Joaquin Almunia said, declining to comment further on the Ryanair statement.

In a statement, Flybe said it is disappointed by today's news and will await the outcome of the appeal process Ryanair referred to in its statement

''The proposed transaction with Ryanair to transfer a number of aircraft and operating routes to Flybe is contingent upon the EC's approval of Ryanair's proposed remedies and a successful bid by Ryanair for Aer Lingus,'' the UK-based airline said.

Varadkar not satisfied with Flybe proposal

Earlier, the Transport Minister said the Ryanair-Flybe proposal does not do enough to satisfy the Government that air passengers will be protected in terms of competition and connectivity.

On the revised Ryanair bid for Aer Lingus, Leo Varadkar said what is being put together with Flybe is only for three years.

He said the fact that Ryanair has to give Flybe "a gift" of €100m to make it a competitor raises questions.

The minister said the Government does not support the Ryanair bid for Aer Lingus because it thinks it would affect connectivity negatively.

This is because IAG will be given the Heathrow slots.

Regarding the Government's stake in Aer Lingus, he said the Government has decided that it will dispose of the Aer Lingus stake at the right time, the right price and in the right conditions.

He said share prices had increased by 41% since he announced that the Government would dispose of its stake.

The minister stated that the Government, with the help of other shareholders, can block the sale. But they can not block the lease of the Heathrow slots, he added.

Elsewhere, Chambers Ireland called on the European Commission to reject Ryanair's proposal to increase its stake in Aer Lingus.

The call comes following a Chambers Ireland submission to the European Commission on the proposal.

Chambers Ireland said that it is vital that Ireland's connectivity with Europe and beyond remains intact due to the fact that Ireland is an island economy reliant on foreign direct investment and exports.

Chambers Ireland Chief Executive Ian Talbot said: "Any merger between Ryanair and Aer Lingus would be anti-competitive and bad for Irish business.

"In any industry competition is vital and Irish and international business users should have choice between a range of airlines, standards and services, including cargo handling from service providers committed to Ireland in the long-term."

The group said it was also worried about Aer Lingus' Heathrow slots.

"A Ryanair takeover raises major concerns regarding the future of these vital slots and long term access for Irish business users," cautioned Seán Murphy from Chambers Ireland Air Transport Users Council.

A column in today's Financial Times noted that Aer Lingus shares now top Ryanair's earlier bid price, partly due to its "effective peformance".

The Lex column said that Aer Lingus should be allowed to continue delivering on that good performance.

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