EU regulators thwart Ryanair bid for Aer Lingus | Business| Economy and finance news from a German perspective | DW | 27.02.2013
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EU regulators thwart Ryanair bid for Aer Lingus

The EU Commission has foiled a third bid by budget carrier Ryanair to take over its Irish rival Aer Lingus, citing monopoly concerns. Ryanair has slammed the ban as politically motivated and vowed to appeal the ruling.

The merger would have harmed consumers by creating a monopoly or a dominant position on 46 routes, the EU Commission said in a statement released Wednesday.

In the opinion of the European Union's executive arm, Ryanair's takeover of its smaller Irish rival Aer Lingus would have reduced choice and most likely would have led to price hikes.

The decision came in spite of an improved remedies package from Ryanair, including divestitures on crossover routes, to allay regulators' concern of unfair competition.

Noting that he was generally in favor of industry consolidation, EU Competition Commissioner Joaquin Almunia said the remedies were simply inadequate to solve the very serious problems the acquisition would have created in the Irish aviation market.

In 2007, Ryanair failed for the first time to take control of Aer Lingus, which was followed by a second takeover bid in 2009 which the low-cost carrier withdrew when it became clear that Brussels was still opposed.

Ryanair vows to fight back

Following the decision, Ryanair said it would launch an appeal against the ruling, claiming it was politically motivated rather than based on competition concerns.

Ryanair's latest remedies package conclusively addressed all of the objections raised by the commission in its 2007 prohibition decision, and resolved all competition issues raised in its 2012 statement of objections, the airline said in a statement Wednesday.

Ryanair already holds a 30-percent stake in Aer Lingus and offered to buy out the Irish government's 25.1 percent stake in July last year. However, Dublin has rejected the offer.

Aer Lingus welcomed the ruling by EU regulators, arguing it wanted to continue as a strong, standalone airline.

uhe/dr (AFP, Reuters, dpa)