Bloomberg News

Ryanair Said to Face Renewed Antitrust Obstacles on Aer Lingus

January 10, 2013

Ryanair Holdings Plc (RYA) was told by the European Commission this week that it must propose further concessions to rescue a bid for Aer Lingus Group Plc (AERL), according to two people familiar with the matter.

European Commission officials met executives from Dublin- based Ryanair in Brussels two days ago to discuss antitrust objections to the bid and outlined shortcomings in remedies proposed by the carrier in December, said the people, who declined to be identified as the matter is private. Ryanair has until the end of the month to respond, one of the people said,

Antoine Colombani, a European Commission spokesman, declined to comment on the process, as did Ryanair spokesman Stephen McNamara.

Europe’s biggest discount airline, which owns 29.8 percent of Aer Lingus, in June renewed its pursuit to buy the rest of its rival, five years after the EU agency blocked an earlier takeover attempt, saying it would create a monopoly for Irish flights. The 694 million euros ($917 million) bid has also drawn opposition from Aer Lingus and Ireland’s government.

Ryanair last month offered new concessions to the European Commission to allay antitrust concerns over the deal after an earlier offer failed to convince regulators, according to two people familiar with the matter. Neither Ryanair nor the EU gave details of the new proposal.

Revolutionary Concessions

Ryanair Chief Executive Officer Michael O’Leary said in September that the company would consider selling its Aer Lingus stake if regulators turned down a “revolutionary” package of concessions. The airline has said it could exit all 46 Dublin routes that overlap with Aer Lingus and that several rival carriers are interested in competing at Irish airports.

International Consolidated Airlines Group SA (IAG), owner of British Airways, in December signed a non-binding agreement to buy landing slots at London’s Heathrow airport from Ryanair if it completes the planned takeover.

The Irish government, which owns 25 percent of Aer Lingus, said last month that Ryanair’s remedies didn’t satisfy their concerns and it wouldn’t support any offer that would significantly undermine flight connections from the country.

The European Commission has a Feb. 27 deadline to rule on the deal. A draft decision from the antitrust agency may be issued in the first two weeks of February, according to a person familiar with the matter.

The Commission said in August that the takeover could eliminate competition on a large number of routes and few new competitors are likely.

EU regulators blocked Ryanair’s bid for Aer Lingus in 2007, saying a takeover would allow the discount airline to dominate 35 routes and control 80 percent of the market in Dublin.

To contact the reporters on this story: Joe Brennan in Dublin at jbrennan29@bloomberg.net; Aoife White in Brussels at awhite62@bloomberg.net.

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.


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