Ryanair will not be able to sell its near 30 per cent holding in Aer Lingus to International Consolidated Airlines’ Group (IAG) or any other bidder without the UK competition regulator’s consent.
The British Court of Appeal has upheld a UK Competition and Markets’ Authority (CMA) ruling that the airline should cut its stake in Aer Lingus to 5 per cent from its current 29.8 per cent, and has refused it leave to appeal to Britain’s Supreme Court.
Ryanair intends challenging the ruling, but will first have to go to the Supreme Court and ask it to overturn the decision refusing it leave to appeal, a process that could take about three months. The airline has already instructed its lawyers to do this.
Meanwhile it has emerged that an order banning the airline from selling any of its Aer Lingus holding without the CMA’s written permission is still in place. The ban would give the regulator the final say should Ryanair decide to accept IAG’s proposed €2.55 a-share offer for Aer Lingus.
The authority issued the order following its original decision in 2013. It normally takes these steps after making a ruling to ensure that the companies involved do nothing to pre-empt any action that it has to take.
Speaking at a press conference to launch its winter schedule, Ryanair’s chief marketing officer, Kenny Jacobs, said that IAG has not discussed its €1.36 billion takeover approach to Aer Lingus with the airline. He added that the company’s board would consider any offer made for its Aer Lingus shares before making a decision.
The airline is the biggest shareholder in its rival, IAG, whose approach values its holding at close to €400 million and which has said any deal would be conditional on Ryanair and the State, which owns 25.1 per cent, accepting its offer.
Mr Jacobs said Ryanair’s move into an increasing number of premier European airports and its targeting of business travellers and families mean it is now doing very much of what it would have done with Aer Lingus had any of its three bids to buy the former State airline succeeded.
“We will grow from 81 million passengers to 90 million passengers this year, and from 90 million to 100 million next year,” he said. Mr Jacobs added that the 19 million passengers added by Ryanair over two years was “a bigger airline than Aer Lingus” which carried 11 million people last year.
"Aer Lingus is a bit of a side-show – it's like Glenroe, it was big in the Eighties but does not matter any more," he said. Mr Jacobs noted that Ryanair believed its rival would have to become part of a larger group if it is to have a long-term future and claimed that its best interests would been served had it joined forces with his company.
Following the Court of Appeal ruling, Ryanair’s spokesman, Robin Kiely, argued that the IAG approach “totally undermines” the CMA’s claim that its ownership of close to 30 per cent of Aer Lingus deterred other airlines from bidding to buy the company.
This was one of the grounds on which the authority made its finding in 2013. Along with attempting to get the British Supreme Court to hear its appeal, Ryanair will ask the CMA to formally review its original ruling.
The CMA said on Thursday that it will consider its options in light of the Court of Appeal judgment.
