Ryanair new bid for Aer Lingus

http://www.ryanair.com/en/news/ryanair-will-appeal-eu-decision

Ryanair, Europe’s only ultra-low cost carrier (ULCC), today (Feb 27) confirmed that it will appeal the EU Commission’s announced decision to prohibit its latest offer for Aer Lingus, which was supported by an historic and unprecedented remedies package that included not one, but two upfront buyers (BA/IAG & Flybe) to take over approximately half of Aer Lingus’ short-haul business.



The transfer to these upfront buyers of Aer Lingus’ business on the 46 crossover routes identified by the EU Commission, together with the relevant slots, aircraft, personnel and branding, was ensured by binding, irrevocable commitments by those upfront buyers including Board approvals.



The history of the EU’s treatment of Ryanair’s two offers for Aer Lingus conclusively proves that this prohibition is a “political” decision to pander to the vested interests of the Irish Government (a minority 25% shareholder in Aer Lingus) and is not one that is based on a fair and reasonable application of EU competition rules or precedent airline merger approvals in Europe

Sbutty wrote:
If they do appeal, what sort of timeframe are we looking at? Years? months?

Hmmm How long is a piece of string?

Thats too bad.

Other than the obvious problem with aircraft delivery availability, it may now be looking a lot more likely that Ryanair should consider purchasing second had long haul aircraft, especially now the 787, well, when the 787 is allowed to fly, that could free up aircraft from other airlines and just grow that side of the business organically. Going to be tough though out on that Atlantic.

Comprehensive review of the case :

http://www.traveldailynews.com/news/article/53576/ryanair-will-appeal-eu-commission-rsquo-s

ending with a statement by Ryanair's Robin Kiely :
“The EU Commission has regrettably reversed its own precedents in order to prohibit Ryanair’s offer for Aer Lingus. Ryanair’s radical remedies package clearly addressed all of the concerns raised by the EU both in its 2007 prohibition and in its November 2012 statement of objections.

At a time when airlines in Europe and further afield are merging to form bigger competition champions (witness American Airlines’ merger with US Airways last week and Emirates’ recent strategic joint-venture with Qantas) the EU Commission has yet again set back competition and choice in Europe while delaying much-needed consolidation.

This decision leaves Aer Lingus as a small, isolated airline and leaves the two Irish airlines at the mercy of the Government-owned Dublin Airport monopoly, which continues to increase passenger charges, deliver third-rate services and oversee traffic declines. Over the past 5 years, as Dublin Airport has doubled its passenger charges, its traffic has declined from 24m to 18m per annum, while Aer Lingus continues to get smaller as it: (1) wet leases short-haul jet aircraft to Virgin to operate new routes from Heathrow to regional UK airports (making no contribution to Irish tourism); (2) rents long-haul aircraft to charter companies outside of Ireland; and (3) transfers more and more of its short-haul routes to smaller, turbo-prop aircraft.

Ryanair regrets that the EU Commission has again failed to apply its own competition rules and precedents in a fair and dispassionate manner. We regret that this prohibition is manifestly motivated by narrow political interests rather than competition concerns and we believe that we have strong grounds for appealing and overturning this politically-inspired prohibition. Accordingly, Ryanair has instructed its legal advisers to prepare a comprehensive appeal against this manifestly unjust prohibition.” - See more at: http://www.traveldailynews.com/news/article/53576/ryanair-will-appeal-eu-commission-rsquo-s#sthash.izUnwWMI.dpuf

Ryanair will know within weeks whether it will be forced to sell its stake in Aer Lingus by the UK's Competition Commision.
The watchdog said yesterday that it has restarted a long-running probe into the airline just days after the European Commission blocked Ryanair from buying Aer Lingus in its third takeover attempt of its smaller rival.
The Competition Commission is investigating whether Ryanair exerts undue influence over Aer Lingus through the near 30pc stake it holds in the former flag carrier.
In 2012, the UK's Office of Fair Trading (OFT) determined that Ryanair's stake in Aer Lingus "may give it the ability to exercise material influence over the commercial policy" of its rival. The OFT claimed that there was a "realistic prospect that its stake has resulted or will result in substantial lessening of competition on a number of Ryanair and/or Aer Lingus routes between the UK and Ireland".
It will deliver a preliminary ruling by May and a formal ruling on its investigation by July.

- See more at: http://www.independent.ie/business/world/ryanair-could-be-forced-to-sell-its-stake-in-aer-lingus-29104198.html#sthash.SQuQAAON.dpuf

An detailed analysis by anna-aero :
http://www.anna.aero/2013/03/06/ryanair-aer-lingus-46-route-giveaway-is-biggest-unsolved-mystery-ever/

and its conclusion :

So what would Ryanair have got if the EU had approved it?
•The Aer Lingus transatlantic routes Ryanair would have bought would have to rely on feed from far fewer routes – unless it was going to agree to codeshare deals with Flybe Ireland (its supposed new rival) and/or operate connecting services from Ryanair’s existing hub network at Dublin.
•Ryanair would have given away almost three-quarters of Aer Lingus’ Dublin operations (by seat capacity) and be left with a network of 30 European routes to airports such as Amsterdam, Düsseldorf, Geneva, Hamburg and Zurich – airports which Ryanair has never served because it claims the costs are too high.

When Ryanair originally spoke about acquiring Aer Lingus there seemed to be some logic (the intention of keeping it as a separate brand with a different market proposition to Ryanair, serving major European and North American airports, but with a lower cost base). However, the latest plan of spending a lot of money to buy Aer Lingus, and then spending $150m more to create a new ‘IVF’ competitor is one of three things:
•Business reasons: An amazing conspiracy to drive up the value of its 30% shares (something far too elaborate for poor salaried employees of anna.aero to understand).
•Political reason: A determination to overcome the opposition of successive Irish governments which all hate Ryanair and act and live with it in a state of war.
•Emotional reason: A simple ambition of some of Ireland’s most powerful men to own their national carrier (the airline business does this to people and, let’s face it, they’ve worked and saved hard and can easily afford a few luxuries without shareholder objection).

Britain's highest court refused to review a lower court's decision to allow the investigation to go ahead because the low cost airline would not “raise an arguable point of law of general public importance,” the court said in a statement today.

Ryanair has been fighting with regulators since acquiring Aer Lingus shares in 2006 as part of an earlier takeover bid, that the European Union ultimately blocked on competition grounds.

A European competition commission blocked Ryanair's latest attempt to take over its Irish rival Aer Lingus in February on competition concerns, prompting an immediate warning from the low cost carrier that it will appeal the "manifestly unjust" and "political" decision.

The European Commission said the €694m (£600m) proposed deal would have "harmed consumers by creating a monopoly or a dominant position on 46 routes where, currently, Aer Lingus and Ryanair compete vigorously against each other".

Ryanair, which already owns 30pc of its rival, had sought to alleviate competition concerns by striking a deal with UK regional carrier Flybe, which had agreed to take on 43 Aer Lingus routes if the deal was approved. British Airways-owned IAG had also agreed to operate routes between Ireland the Gatwick airport.