RYANAIR HAS SAID it is to appeal a report by the UK’s Competition Commission.
The report from the UKCC says that Ryanair will be required to sell its 29.8 per cent stake in Aer Lingus down to 5 per cent.
Ryanair confirmed that it will appeal the UK Competition Commission (UKCC) final report, which found that Ryanair, through its minority (29.8 per cent) shareholding in Aer Lingus, “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 airline said that the UKCC “wrongly” found this, calling it a “baseless claim” which it says “is manifestly disproven by 7 years of evidence and by the European Commission’s recent (February 2013) ruling that competition between Ryanair and Aer Lingus has “intensified” since 2007″.
Ryanair acquired a stake in Aer Lingus in late 2006. Its latest bid for the remaining shareholding was in July 2012 and was prohibited by the European Commission on 27 February 2013.
Ryanair lodged an appeal with the General Court against this decision on 8 May 2013.
Ryanair further said that under EU law, the UKCC has “a duty of sincere cooperation with the EU”, and cannot contradict or reach different conclusions to the European Commission’s findings.
It says that the report by the UKCC “infringes this legal duty by ignoring and contradicting the recent findings of the European Commission” that:
“Aer Lingus and Ryanair compete on a greater number of routes compared to the 2007 Decision”, “there is significant competitive interaction between the Parties”, and “evidence collected by the Commission in the market investigation has also confirmed that the competitive relationship between Ryanair and Aer Lingus has at least persisted, if not increased, since 2007”.
The UKCC has also dismissed Ryanair’s remedies package which addressed the UKCC’s concerns.
It rejected Ryanair’s offer to unconditionally sell its minority stake to any other airline that makes a bid for Aer Lingus and obtains acceptances from 50.1 per cent of Aer Lingus’ shareholders. Ryanair also offered to support Aer Lingus’ rights issues and any disposal of Aer Lingus’ Heathrow slots.
Ryanair believes that the UKCC’s ruling “demonstrates that it did not conduct any fair investigation”.
Until the completion of Ryanair’s appeal to the EU courts against the European Commission’s February 2013 prohibition decision, the airline said the CC cannot impose any remedies on Ryanair.
Ryanair’s Michael O’Leary described the report as “bizarre and manifestly wrong but also entirely expected”.
He also said that this case, “involving two Irish airlines where one (Aer Lingus) accounts for less than 1 per cent of the UK’s total air traffic and concerns very few UK consumers, is yet another enormous waste of UK taxpayer resources”.
The company’s lawyers will lodge the appeal with the Competition Appeal Tribunal in the coming weeks.