Ryanair Chief to Challenge EU's Anti-Trust Ruling

29 June 2007

BRUSSELS: Combative Ryanair ceo Michael O'Leary says he will appeal against a European Union ruling that has grounded his proposed takeover of rival carrier Aer Lingus.

EU competition commissioner Neelie Kroes said the €1.48bn ($1.99bn; £994m) deal would have created a near monopoly in the market, leading to less choice, lower quality and higher prices.

O'Leary, no stranger to controversial outbursts, condemned the decision as "nakedly political". He said the Irish government was against a takeover of Aer Lingus, in which it retains a 25.3% stake.

He added he was confident the ruling would be overturned on appeal, and that the EU had approved mergers between Air France and KLM and between Lufthansa and Swissair.

But Kroes insisted her decision was "legally sound" and would "bear the scrutiny" of the courts.

In addition, a Commission spokesman pointed out that a merged Ryanair/Aer Lingus would have accounted for more than 80% of all European flights into and out of Dublin and that its union would have affected many more passengers than the previous mergers cited by O'Leary.

The rejection of the deal came as no surprise. However, there remained the possibility that Ryanair might be ordered to dispose of its existing 25% stake in the Irish flag carrier.

In the event, the Commission stopped short of such a ruling. Kroes said: "Since Ryanair is not in a position to exert de jure or de facto control [over Aer Lingus], the Commission is not in a position to require Ryanair to divest its minority shareholding, which is, by the way, not a controlling stake."

Data sourced from Financial Times online; additional content by WARC staff