EC block on Ryanair bid a blow for 'Flybe Ireland' deal
The European Commission is set to veto Ryanair's Aer Lingus takeover bid, damping hopes of the 100 million euro launch of Flybe Ireland.
Ryanair said it has been notified by the European Commission that its proposed 694 million euro Aer Lingus buyout plan will be rejected. Describing the decision as "political" the low-cost carrier said it would launch an appeal in the European courts.
Last week, Exeter-based Flybe confirmed it had reached agreement with Ryanair to fly 43 short-haul Aer Lingus routes, in a move to satisfy competition rules if Ryanair's takeover bid was successful.
Under the deal agreed in principle, a new company, Flybe Ireland, would be established and receive a minimum of nine Airbus A320 aircraft and a cash injection of worth around £85.9 million from Ryanair.
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Yesterday, Ryanair claimed European chiefs were holding it to higher standards than any other EU airline.
"It appears clear from [the] meeting that no matter what remedies Ryanair offered, we were not going to get a fair hearing and were going to be prohibited regardless of competition rules," Ryanair spokesman Robin Kiely said.
Ryanair's takeover plan – a third bid by Michael O'Leary for Aer Lingus – appeared to have been boosted last week when Flybe agreed a plan to fly 43 of Aer Lingus' short-haul routes, easing competition concerns.
There had also been a commitment from the IAG airline group to run overlapping Aer Lingus/Ryanair routes between Dublin and London Gatwick to ensure competition.
Mr Kiely said: "Given Ryanair's remedies package clearly addresses every issue raised in the EU's Statement of Objections, any decision to prohibit would be manifestly unfair and in contravention of EU competition rules.
"This decision is clearly a political one to meet the narrow, vested interests of the Irish Government and is not based on competition law."
Ryanair has instructed lawyers to appeal the refusal to the European courts.
In a statement issued by Flybe Group last night, the Exeter-based airline said that it was "disappointed" by the news, but it would await the outcome of Ryanair's appeal process. It stressed: "The proposed transaction with Ryanair to transfer a number of aircraft and operating routes to Flybe is contingent upon the EC's approval of Ryanair's proposed remedies and a successful bid by Ryanair for Aer Lingus."
Flybe added that it will continue to focus on its delivery of a £35 million cost-savings exercise to get out of the red, announced last month.
Meanwhile, Aer Lingus said it was in a much stronger position now than at the time of Ryanair's first takeover bid in 2007.
A spokesman said: "The reasons for prohibition are therefore even stronger in this instance than with the previous offers. Therefore, it was and remains Aer Lingus' position that the offer should never have been made."