RYANAIR'S LATEST bid to acquire Aer Lingus would be evaluated on the basis of its effect on competition in the Irish airline market, the European Commission said yesterday.
"If Ryanair notifies its bid to the commission then we would examine it according to the usual criteria based on whether we consider that the transaction would reduce effective competition. For example, in terms of price increases or reduced customer choice," said a commission spokesman, who emphasised the use of "normal merger criteria".
Under merger rules it is the responsibility of the bidding party, Ryanair, to verify whether it needs to notify the proposed transaction to the commission. Given that the commission blocked its previous bid for Aer Lingus last year, this is a near certainty.
The extraordinary economic circumstances are unlikely to persuade Competition Commissioner Neelie Kroes to reverse her thinking on Ryanair/Aer Lingus. In recent speeches she has underlined that EU state aid and merger rules are part of the solution, "not part of the problem", suggesting that the new environment will not change the rule book.
Ryanair will have to go to considerable lengths to prove that its new bid offers the requisite remedies to address the serious competition concerns that the commission found in its original decision in June 2007.
At that time Ms Kroes blocked the proposed merger to safeguard Irish consumers, who, she said, depended "heavily on air transport".
However, she added that the commission decision did not rule out a future merger.
It was not "a never, ever decision", and she said the deal could go ahead under the right conditions if Ryanair could offer remedies which met the commission's competition requirements.
