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EU blocks Ryanair bid to take over Aer Lingus

Published on NewsOK Modified: February 27, 2013 at 8:42 am •  Published: February 27, 2013

BRUSSELS (AP) — The European Union's antitrust authority on Wednesday blocked budget airline Ryanair's renewed bid to take over Irish carrier Aer Lingus on grounds that it would undermine competition and drive up ticket prices.

The merger of the two leading airlines operating from Ireland would have harmed consumers by creating a monopoly or a dominant position on almost 50 routes where Aer Lingus and Ryanair are currently competing, said the EU Commission, the bloc's executive arm.

"This would have reduced choice and, most likely, would have led to price increases for consumers travelling on these routes," it said, rejecting the remedies offered by Ryanair in return for a green light to its takeover bid.

Ryanair, Europe's biggest budget airline, immediately said it will appeal the ruling, decrying it as a "political decision" bowing to the interests of the Irish government. Its offer valued Aer Lingus at about €700 million ($900 million).

"At a time when airlines in Europe and further afield are merging to form bigger competition champions (...) the EU Commission has yet again set back competition and choice in Europe while delaying much-needed consolidation," Ryanair spokesman Robin Kiely said in a statement.

The Irish government, which holds a 25 percent stake in Aer Lingus, has opposed the takeover bid. It feared job losses at the former state carrier and said the takeover would give Ryanair, among others, a dominant position for flights between Ireland and Britain.

The EU said both airlines combined would control 87 percent of all short-haul flights out of Dublin, creating a dominant position on 18 routes and an "outright monopoly" on 28 others.

"The acquisition raised very significant competition concerns since it would have eliminated Ryanair's strongest competitor," said EU antitrust chief Joaquin Almunia. "In the end the most likely outcome of this transaction would have been quite simple: When flying to and from Ireland, passengers ... would have ended up paying higher prices," he added.

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