Ryanair 'May Have To Reduce Stake In Aer Lingus'

The UK Competition Commission has said Ryanair may have to reduce its stake in Aer Lingus.

The commission said it had concerns that the 29.8% stake Ryanair holds could reduce competition on routes between the UK and Ireland.

In provisional findings, a report said Ryanair's stake allowed the company to influence its Irish rival's strategy and was likely to "weaken its main competitor". It also said the stake could threaten to obstruct Aer Lingus's ability to merge with other airlines, and thereby allowing it to remain competitive.

Michael O'Leary, Chief Executive of Ryanair, described the commission's decision as "bizarre and manifestly wrong". He added that the findings were "unfounded" and "in breach of EU law".

The report is a further setback for the airline who has attempted to buy Aer Lingus on a number of occasions.

Using a February 2013 report by the European Commission, Mr O'Leary said found that competition between Ryanair and Aer Lingus had intensified since 2007.

He added: "While Ryanair is one of the UK’s largest airlines, Aer Lingus has a tiny presence in the UK, serving just six routes to the Republic of Ireland, a traffic base that has declined over the past 3 years and now accounts for less than 1% of all UK air traffic.

"This case, involving two Irish airlines where one (Aer Lingus) accounts for less than 1% of the UK’s total air traffic, is yet another enormous waste of UK taxpayer resources on a case which has little if any impact on UK consumers."

The Competition Commission's final decision is due in July, and Ryanair has said it would appeal if the decision remained unchanged.

(JP/CD)