Commission to examine Ryanair bid

European officials have launched an in-depth investigation into Ryanair’s most recent takeover bid for Aer Lingus to determine how seriously competition would be hit.

Ryanair, which already owns 29.8 per cent of Aer Lingus, offered €1.30 per share in June, valuing Aer Lingus at €694 million. The Commission’s preliminary investigation into the proposed takeover 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,” the Commission stated.

It said that the takeover could “lead to the elimination of actual and potential competition on a large number of these routes.”

The Government still holds a 25 per cent stake in Aer Lingus, which has been identified for inclusion in the sale of state assets.

The budget airline had previously bid for takeover in 2007 when it had 400 routes and 40 million passengers and Aer Lingus had 80 routes and 8.6 million passengers. The Commission prohibited this because it would have created a monopoly on the 35 routes operated by both parties at that time.

Ryanair now has 294 aircraft and 51 bases across Europe. It had 75.8 million passengers in March 2012 while Aer Lingus has 108 routes and carried 10.4 million passengers in 2011.

A decision must be made by 14 January 2013.