Saturday

27th Aug 2016

Ryanair slams EU's 'political' decision on Aer Lingus bid

  • Almunia said the decision will 'protect the millions of Europeans who travel to and from Ireland' (Photo: andynash)

Budget airline Ryanair has slammed what it described as a "politically motivated" decision by the European Commission to block its €694 million bid to take over rival Aer Lingus.

In a strongly worded statement issued as the bloc's competition chief Joaquin Almunia confirmed the EU's decision on Wednesday (27 February), Ryanair accused him of making a “political” decision to pander to the vested interests of the Irish government."

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

The Irish government holds a 25 percent stake in Aer Lingus, while Ryanair already owns 30 percent.

For his part, Aer Lingus CEO Christoph Mueller said that Ryanair's offer "should never have been made."

He also claimed that the Michael O'Leary-fronted airline had "made its offer without any reasonable belief that it could obtain clearance.” The UK Competition Commission is currently investigating whether Ryanair's existing shareholding breaches competition rules.

Explaining the decision to reporters, Almunia said that the decision would "protect the millions of Europeans who travel to and from Ireland." He added that the merger would have "directly harmed passengers, who would have had to pay higher fares."

Despite this, Ryanair has already signalled its intent to appeal the case to the EU's General Court in Luxembourg.

In its statement, the budget airline claimed that it had offered "an historic and unprecedented remedies package that included not one, but two upfront buyers (BA/IAG & Flybe) to take over approximately half of Aer Lingus’ short-haul business."

However, commissioner Almunia insisted that allowing the merger would still have created an effective monopoly on 28 of the 46 routes where Ryanair and Aer Lingus are currently in competition. He also dismissed the suggestion that FlyBe would be able to fill the gap left by Aer Lingus, commenting that the Commission did not think FlyBe would have been able to "compete on a lasting basis."

He concluded that "remedying problems of such magnitude would have required a countervailing force capable to be a strong and viable competitor to Ryanair - precisely the kind of competitor that Aer Lingus is today."

Ryanair spokesman Robin Kiely added that the commission decision left Aer Lingus as "a small, isolated airline and leaves the two Irish airlines at the mercy of the government-owned Dublin Airport monopoly, which continues to increase passenger charges, deliver third-rate services and oversee traffic declines."

The decision is the second time that the commission has used the EU merger directive to prevent the takeover, having originally thrown out a bid by Ryanair in 2007. Ryanair then dropped a second takeover bid in 2009.

Meanwhile, the EU executive has blocked an airline merger having also prevented a takeover attempt by Aegean of Olympic airlines, Greece's two largest carriers, in January 2011.

News in Brief

  1. Hungary plans to reinforce border fence against migrants
  2. France's highest court suspends burkini ban
  3. Greeks paid €1bn more in taxes in June
  4. Greek minister denounces EU letter on former statistics chief
  5. Turks seeking asylum in Greece may cause diplomatic row
  6. Merkel becomes digital resident of Estonia
  7. Report: VW will compensate US dealers with €1bln
  8. EU mulls making Google pay news media for content

Stakeholders' Highlights

  1. GoogleBrussels - home of beer, fries, chocolate and Google’s Public Policy Team - follow @GoogleBrussels
  2. HuaweiSeeds for the Future Programme to Bring Students from 50 countries to China for Much-Needed ICT Training
  3. EFASpain is not a democratic state. EFA expresses its solidarity to Arnaldo Otegi and EH Bildu
  4. UNICEFBoko Haram Violence in Lake Chad Region Leaves Children Displaced and Trapped
  5. HuaweiMaking Cities Smarter and Safer
  6. GoogleHow Google Makes Connections More Secure For Users
  7. EGBAThe EU Court of Justice Confirms the Application of Proportionality in Assessing Gambling Laws
  8. World VisionThe EU and Member States Must Not Use Overseas Aid for Promoting EU Interests
  9. Dialogue PlatformInterview: "There is a witch hunt against the Gulen Movement in Turkey"
  10. ACCAACCA Calls for ‘Future Looking’ Integrated Reporting Culture With IIRC and IAAER
  11. EURidNominate Your Favourite .eu or .ею Website for the .EU Web Awards 2016 Today!
  12. Dialogue PlatformAn Interview on Gulen Movement & Recent Coup Attempt in Turkey