Ryanair Forced to Sell Aer Lingus Stake

Ryanair will be required to sell its 29.8 percent stake in Aer Lingus Group following a decision by the Competition Commission in the UK. The Irish low-cost carrier will be forced to sell its stake down to five percent.

This will be accompanied by obligations on Ryanair not to seek or accept board representation or acquire further shares.

In its final report published today, the CC confirmed its provisional findings that Ryanair’s minority shareholding had led or may be expected to lead to a substantial lessening of competition between the airlines on routes between Great Britain and Ireland.

The importance of scale to airlines is clear from evidence of widespread industry consolidation in recent years, the CC said.

Against that background, the CC formed the view that Aer Lingus’s commercial policy and strategy was likely to be affected by Ryanair’s minority shareholding, in particular because it was likely to impede or prevent Aer Lingus from being acquired by, or combining with another airline.

The CC was also concerned that Ryanair’s minority shareholding was likely to affect Aer Lingus’s commercial policy and strategy by allowing Ryanair to block special resolutions, restricting Aer Lingus’s ability to issue shares and raise capital and to limit Aer Lingus’s ability to manage effectively its portfolio of Heathrow slots.

Ryanair’s shareholding also increased the likelihood of Ryanair mounting further bids for Aer Lingus, with the associated disruption to Aer Lingus’s ability to implement its commercial strategy.