Ryanair to sell Aer Lingus stake

Ryanair is prepared to sell it’s stake in Aer Lingus in an attempt to get the UK Competition Commission off it’s back. Currently, it investigating Ryanair to see if the current holding of 29.8% is preventing Aer Lingus from being competitive.

However, as you might have guessed, Ryanair aren’t happy in the least:

In the release (at http://www.ryanair.com/en/news/ryanair-offers-to-sell-aer-lingus-stake-to-another-eu-airline) the airline states:

“In order to dispel the CC’s unfounded and invented “concern” that Ryanair’s shareholding may prevent Aer Lingus from being acquired by another EU airline, Ryanair will undertake to unconditionally sell its 29% shareholding to any other EU airline that makes an offer for Aer Lingus and obtains acceptances from 50.1% of Aer Lingus shareholders.
The above remedy is without prejudice to Ryanair’s vehement objection to the CC’s manifestly false conclusion that Ryanair has influence over Aer Lingus’ commercial strategy and/or that Ryanair’s 6½ year old minority shareholding in Aer Lingus has resulted in a lessening of competition. This conclusion is flatly contradicted by 6½ years of evidence, by the European Commission’s findings in February 2013 that competition between Ryanair and Aer Lingus has intensified, and by the evidence submitted even by Aer Lingus and the Irish Government (to the EU), which proves that competition between Ryanair and Aer Lingus intensified to the benefit of consumers over the last 6½ years.

Ryanair’s Robin Kiely said:

“It is clear from the CC’s own Provisional Findings report that it has found no evidence of any lessening of competition between Ryanair and Aer Lingus. In fact, Ryanair’s recent (3rd) offer for Aer Lingus was prohibited by the EU precisely because of the evidence, submitted by both Aer Lingus and the Irish Government, that competition between Ryanair and Aer Lingus has “intensified” during the past 6½ years.

These inconvenient facts have reduced the CC’s Simon Polito (Chairman) and Roger Davis (Member) to inventing new and fantastical “concerns” in order to justify their apparently premeditated and biased “thinking” that Ryanair should be forced to sell down this 6½ year old minority stake. The only remaining “concern” they can now dream up is that Ryanair’s 29% stake “might” prevent another EU airline buying Aer Lingus; despite 6½ years of evidence (and repeated public statements) that no other EU airline has any interest in acquiring Aer Lingus.

In order to remove any remaining shred of credibility from this CC process and eliminate any doubt about this imaginary albeit non-existent “concern”, Ryanair has now agreed that it will unconditionally sell its 6½ year old minority stake to any other EU airline which makes an offer for, and acquires more than 50.1% of, Aer Lingus shares, at the same price and terms which are accepted by these other 50.1% of Aer Lingus shareholders. This remedy unconditionally removes any ability by Ryanair to block any future takeover of Aer Lingus by another EU airline.

This bogus CC “concern” has now been fatally undermined thereby removing any requirement for a divestment of Ryanair’s 6½ year old minority shareholding which even the CC now admits hasn’t given Ryanair any influence, and Aer Lingus admits has led to intensified competition to the benefit of the perhaps 1 or maybe 2 UK consumers who even fly Aer Lingus.”

There’s a bit of catty calling there if I do say so myself.

Ryanair has attempted various attempts of taking over Aer Lingus, being rebuffed by the European Commission most times. Most times, the major reasons the takeover was refused was that the combination of the two airlines would give Ryanair major hold over all Irish destinations, with no competition to face them off.

The UK Competition Commision was due to report on the shareholding on 11th July – this date has been pushed back to 5th September (although the report is expected sooner).

For Aer Lingus, this will force the airline to stand on its own two feet and dictate its own strategy.

For Ryanair – it’s open season. Expect bloody and nasty fare wars to see who survives this….