Budget airline Ryanair may be forced by British regulators to sell off half of its stake in Aer Lingus, reports the Irish Independent.
This week the UK Competition Commission is expected to decide if the Ryanair's 29.8 percent stake in Aer Lingus distorts the market for flights between Ireland and Britain. With flights between the two countries run almost exclusively by the two airlines, it is expected the commission will force Michael O'Leary's firm to reduce its holding by half. The move would all but end Ryanair's chances of buying the former national carrier.
O'Leary has attempted to buy Aer Lingus three times already, but all three bids have been stopped by regulators on competition grounds.
Britain's Office of Fair Trading has previously said that the ownership structure could allow Ryanair to have "material influence over the commercial policy" of the former state-owned carrier. The Irish Independent reports that an an institutional shareholder in Aer Lingus told the commission earlier this month that Ryanair might be able to stop Aer Lingus from raising equity to fund new aircraft purchases if such a situation arose.
O'Leary has said he would appeal any order to sell any of his company's stake in Aer Lingus.
"I can't imagine they'll require us to sell all of the stake, but there'll be some partial sell-down," he said.
"That will expose them to a lot of legal issues."
However, Aer Lingus is likely to welcome such a decision from the commission, with its chief executive, Christoph Mueller, saying he wants to see Ryanair "off the shareholder register."
The Irish government, which has retained a quarter of Aer Lingus, also seems to be against a Ryanair takeover. Transport Minister Leo Varadkar expressed reservations after the airline's most recent bid for Aer Lingus.
Moving to Ireland
After living in Ireland for almost one year, this is what I’ve learned