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UK orders Ryanair to cut Aer Lingus stake

Tuesday, August 27, 2013 - 00:58

Aug.28 - Britain's competition watchdog has ordered budget carrier Ryanair to cut its stake in smaller Irish rival Aer Lingus from 30% to 5%, saying the current arrangement could reduce competition. Ryanair is appealing the decision, but as Ciara Sutton reports it appears to all but end the airline's seven-year pursuit of Ireland's former flag carrier.

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5% is today's daily digit in Europe - the stake which Ryanair is allowed to hold in its smaller rival Aer Lingus, according to Britain's competition watchdog. The budget carrier currently holds a 30% stake in Irish airline Aer Lingus. But the UK says the current arrangement has the potential to substantially reduce competition. Ryanair said it would appeal against what it described as a "bizarre and manifestly wrong" decision. The watchdog's ruling comes just six months after the European Commission blocked Ryanair's third bid to takeover Aer Lingus, and seems to end its seven-year pursuit of the former Irish flag carrier. Analysts say the legal process could last years, as Ryanair appeals both decisions. That means Aer Lingus' management is unlikely to be able to quickly fulfil its ambition of getting Ryanair off the company's share register and replacing it with institutional investors or a strategic partner.

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UK orders Ryanair to cut Aer Lingus stake

Tuesday, August 27, 2013 - 00:58