European Commission blocks Ryanair takeover of Aer Lingus

In what is surprising… well… no-one, The European Commission has blocked Ryanair from taking over Aer Lingus.

Commision Neelie Kroes states that the takover would

Have led to dramatically reduced choice for consumers and, as a result, the likelihood of lower quality and higher fares. They were in particular not capable of ensuring that other airlines would enter the market on a sufficient scale to compete effectively with the merged airline.”

Ryanair is of course – fuming, and going to appeal. It calls the actions of the European Commission:

“A political decision to pander to the vested interests of the Irish government—which is a minority 25% shareholder in Aer Lingus—and is not one that is based on a fair and reasonable application of EU competition rules or precedent airline merger approvals in Europe.”

Meanwhile, Aer Lingus seems to be happy, stating  that

“Aer Lingus’ position from the outset has been that Ryanair’s offer should never have been made. The series of inadequate remedy offers presented by Ryanair only underlines the view that Ryanair made its offer without any reasonable belief that it could obtain clearance”

This is the 3rd attempt that Ryanair has gone after Aer Lingus, with this the 3rd rejection by European Commission officials. This time, it tried to make a redress by convincing IAG and FlyBe to fly routes that were only flown by Aer Lingus and Ryanair. It seems that this didn’t please the commission enough to grant the takeover.

So what next for this debacle? Well expect the lawyers to be making lots of money as Ryanair will probably deploy its legal team to try and overturn the decision. I’d also expect Ryanair to go on an offensive and launch a fare ware on routes where there is competition.

And that’s amusing in some ways – because if Ryanair hurts Aer Lingus, it will hurt the value of the share holdings Ryanair holds in Aer Lingus.

For me, I like the choice of two different airlines with two different methods in how it handles customers across the Irish Sea.  I have tried Ryanair in the dim and distant past – I didn’t like it then (and that’s when they had things like.. boarding passes and non chargeable check-in), and I’m happy to hand over money to Aer Lingus more than once (there are good segments on EI in this trip report and this trip report)

And choice is what drives the industry – lets hope Aer Lingus can build on this.