Ryanair must slash Aer Lingus stake

Irish no-frills airline Ryanair must slash its almost 30-percent stake in rival Aer Lingus on grounds of unfair competition, a British watchdog ruled on Wednesday, confirming a preliminary ruling. The Competition Commission (CC) has ordered Ryanair to cut its minority holding to just 5.0 percent. The commission argued that the current situation has led to "substantial lessening of competition between the airlines on routes" between Britain and Ireland. Ryanair said it would appeal against the decision, while Aer Lingus welcomed the CC ruling. "In its final report published today, the CC confirmed its provisional findings that Ryanair's minority 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," the watchdog said in a statement. "Ryanair Holdings plc will be required to sell its 29.8-percent stake in Aer Lingus Group plc down to five percent," it added. The CC additionally felt that the level of Ryanair's stake was "likely to impede or prevent Aer Lingus from being acquired by, or combining with another airline". In February, the European Commission, the EU's executive arm, had barred Ryanair's third attempt since 2007 to take over Aer Lingus, citing concerns that the interests of passengers would be badly affected. Aer Lingus in any case snubbed all of Ryanair's takeover attempts, arguing that it was a strong stand-alone airline. The Irish government owns about 25 percent of Aer Lingus and has refused to sell its stake to its competitor. Ryanair said on Wednesday that it would appeal against the CC's "unlawful ruling". Ryanair chief executive Michael O'Leary added in a company statement: "This case, involving two Irish airlines where one, Aer Lingus, accounts for less than one percent of the UK's total air traffic and concerns very few UK consumers, is yet another enormous waste of UK taxpayer resources from a body which took no action whatsoever when the two main UK airlines, BA and bmi, merged. "It would appear to be a case of one rule for the UK airlines but an invented set of rules for two Irish airlines," added O'Leary, who is known for his outspoken comments. Aer Lingus meanwhile backed the CC ruling, with its chairman Colm Barrington calling the current size of the Ryanair stake "unacceptable" owing to the fact that the European Commission had repeatedly blocked its rival's hostile takeover attempts. He added in a company statement: "The implementation of the Competition Commission's decision that Ryanair must reduce its anti-competitive shareholding will position Aer Lingus for future growth and opportunities which will make it an even stronger competitor in the market. "