EU blocks Ryanair bid to take over Aer Lingus

Published on NewsOK Modified: February 27, 2013 at 8:42 am •  Published: February 27, 2013
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Ryanair, Aer Lingus' biggest shareholder with a 30 percent stake, first tried to take over the Irish carrier in 2006 but was blocked by the EU Commission. The company has since resubmitted its bid, insisting Europe's airline landscape was changing rapidly with regional airlines failing and larger ones merging to remain profitable. The company also claimed that the takeover would drive down average ticket prices.

"We regret that this prohibition is manifestly motivated by narrow political interests rather than competition concerns and we believe that we have strong grounds for appealing and overturning this politically-inspired prohibition," Kiely said.

The Commission has recently cleared large airline mergers or takeovers, such as those between British Airways and Iberia or Lufthansa and Austrian Airlines. But Almunia told reporters the Ryanair case was different because the two airlines are operating on the same market with Dublin as an important hub for both. The case therefore was similar to the proposed merger between the Greece-based airlines Olympic and Aegean, which the EU also blocked in 2011, he said.

Aer Lingus cheered the EU's decision.

"Aer Lingus' position from the outset has been that Ryanair's offer should never have been made," chief executive Christoph Mueller said in a statement.

The airline has also sued Ryanair in an effort to force its rival to divest its 30 percent stake. It says an investigation by Britain's competition watchdog examining the stake is still pending.

Aer Lingus has struggled in recent years to slash costs sufficiently to compete with Ryanair, which is Europe's fastest-growing airline. It has suffered regular battles with labor unions, whereas Ryanair doesn't recognize them.

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Shawn Pogatchnik in Dublin contributed reporting.

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Juergen Baetz can be reached on Twitter at http://www.twitter.com/jbaetz



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