The EC has once again declined Ryanair’s attempt to buy Aer Lingus, its rival airline. The last attempt of Ryanair was in June as they made an offer for €694 million, but Aer Lingus refused the offer while the European Commission stated that they want to review the effects which such a takeover can have on the competition.
The EC’s statement states: “We are launching an investigation on the eventual take over as we feel that the potential takeover may concern competition. At the moment, Aer Lingus and Ryanair are two of the main companies serving the Dublin airport. Most of the European routes out of Dublin are divided between those companies and currently they compete with each other. Not only this, but many of the routes aren’t served by any other airline and a potential takeover can eliminate potential competition on these routes”
Now, the European Commission has 90 days to come up with a decision and report the impact which this takeover may have on competition. The deadline is January 14, 2013. The current bid of Ryanair is automatically lapsed, because of the European Commission’s decision to start the “Phase II” review. Despite that fact, the airline stated that they are planning to launch a new bid as soon as the EC allows the take over.
Executives at Aer Lingus released a statement: “The first takeover attempt by Ryanair was back in 2007 and it was declined on competition grounds. Now, we are a more stable and stronger airline than back in 2007 and we are the only serious competitor of Ryanair on many Irish air routes. The number of routes coming in and out of Ireland has drastically increased since 2007 and the competition between us and Ryanair has drastically increased as well. We believe that the EC’s decision to prohibit the takeover is stronger than it was in 2007.”