EU opens investigation into Ryanair move for Aer Lingus

EU opens investigation into Ryanair move for Aer Lingus

The European Commission has opened an in-depth investigation into the proposed acquisition of Aer Lingus by the low cost carrier Ryanair, which was notified to the Commission on 24 July 2012.

Both are major players in the Irish passenger air transport services market.

The Commission’s preliminary investigation into the proposed takeover, which takes the form of a public offer, indicated potential competition concerns.

Ryanair and Aer Lingus are the main operators out of Dublin airport.

On a large number of European routes, mainly out of Ireland, the two airlines are each other’s closest competitors and barriers to entry appear to be high.

Many of these routes are currently only served by the two airlines.

The takeover could therefore lead to the elimination of actual and potential competition on a large number of these routes.

The Commission will now investigate the proposed merger in-depth to determine whether these initial concerns are confirmed or not.

The Commission now has 90 working days, until January 14th 2013, to take a decision on whether the proposed transaction would significantly impede effective competition in the European Economic Area (EEA).

Background

The Commission prohibited the first attempt by Ryanair to take over Aer Lingus in its decision M.4439 of June 27th.

The second attempt by Ryanair to take over Aer Lingus was notified to the Commission on January 8th 2009 and subsequently withdrawn.

In comparison with the situation in 2007, when the Commission adopted its decision, the number of routes where both Ryanair and Aer Lingus operate has increased.

Ryanair already owns 29.82 per cent of Aer Lingus.

This minority shareholding is currently under review by the UK Competition Commission, in particular as to its effects on competition between Ryanair and Aer Lingus on routes between Ireland and the United Kingdom.