Ryanair says to appeal decision
Britain's competition watchdog on Wednesday ordered Ryanair to cut its stake in smaller Irish rival Aer Lingus to 5 percent from 30 percent, saying the current arrangement had the potential to substantially reduce competition.
Ryanair said would appeal against what it described as a "bizarre and manifestly wrong" decision in a legal process that could last years.
Six months after the European Commission blocked Ryanair's third bid to takeover Aer Lingus, the decision appears to all but end Ryanair boss Michael O'Leary's seven-year pursuit of Ireland's former flag carrier.
But appeals against both decisions mean Aer Lingus management is unlikely to quickly fulfil its ambition of getting Ryanair off the company's share register and replace it with institutional investors or a strategic partner.
O'Leary has made three failed takeover bids for 75-year-old Aer Lingus in an attempt to cap the rise of his upstart airline that began with one 15-seater plane in 1985.
Ryanair's low cost model has since come to dominate European aviation, carrying 77 million passengers last year compared with 9.5 million passengers at Aer Lingus.
Having already written down the 407 million euros it paid for the Aer Lingus stake in 2007-2009 to 80 million euros, Ryanair could actually book a profit at the current share price, which would value the stake at around 270 million euros. However, it says no one has expressed an interest in buying it.
Britain's Competition Commission ruled that Ryanair's shareholding had "led or may be expected to lead to a substantial lessening of competition between the airlines on routes between Great Britain and Ireland."
Aer Lingus' commercial policy and strategy were likely to be affected by Ryanair's shareholding and it was likely to impede Aer Lingus from being acquired by another airline, it added.
Ryanair said the ruling violated European law due to contradictions with recent findings of the European Commission and that it failed to acknowledge Ryanair's recent offer to unconditionally sell its minority stake to any other airline that secures Aer Lingus shareholder approval for a takeover bid.
O'Leary said in a statement that Ryanair's lawyers would lodge a complaint to the competition appeal tribunal in the coming weeks.
