Low-cost airline Ryanair has lost the latest round in its ongoing battle to acquire rival Irish carrier Aer Lingus.

The European Union’s General Court ruled the European Commission had been right to block the takeover bid by Ryanair of the former state-run carrier.

The Commission – which rarely blocks acquisitions of this nature – vetoed the deal on the grounds it would create a monopoly at Dublin airport.

Despite the setback, Ryanair was able to claim a partial victory, with the court upholding a further Commission ruling stating the airline will not be forced to divest its minority shareholding in Aer Lingus

The former Irish flag-carrier has been trying to force Ryanair to divest its holding and has resisted two takeover attempts its rival.

Ryanair acquired a 29.8 per cent stake in Aer Lingus after its privatisation in 2006, and has subsequently notified the European Commission it was seeking a takeover.

The low-cost carrier withdrew its latest offer for Aer Lingus – which valued the airline at £619 million – in early 2009.

Chief executive Michael O’Leary has since stated a further bid is unlikely.

Any further bid will be unable to succeed unless the Irish government takes the controversial decision to sell its 25 per cent stake.

“We continue to believe the long-term financial viability of Aer Lingus can only be secured as part of one strong Irish airline group, particularly when the rest of Europe’s airlines are consolidating to three main flag carriers, lead by Air France, British Airways and Lufthansa and two large low fares carriers, Ryanair and easyJet,” added Mr O’Leary.

“Unless Aer Lingus finds a strong airline partner then we believe it is doomed to fail because it can’t compete with Ryanair’s low fares, customer service or scale.”