Takeover bid rejection welcomed

RYANAIR’S bid to take over Aer Lingus lies in tatters this week, something that will be broadly welcomed by supporters of Shannon.

 

There were fears that Shannon’s Heathrow connectivity, which is absolutely crucial for the airport, could be lost following a takeover.

In a statement this week, the low-cost airline indicated it had been told its takeover wouldn’t be approved by the EU Commission.

It said that Ryanair “was notified this morning (Feb 12) at a State of Play meeting with the EU Commission that the EU Commission intends to prohibit Ryanair’s offer for Aer Lingus, despite the fact that Ryanair has met every competition concern raised in the EU’s Statement of Objections and during the review process, including providing the EU – at its request – with irrevocable commitments from not one, but two, upfront buyers to eliminate all competitive overlaps between Ryanair and Aer Lingus.”

It also said that any prohibition decision would be appealed to the European courts. For its part, Aer Lingus said there should never have been a takeover bid.

“As indicated in our statement of June 20, 2012 at the outset of the bid, there was significant uncertainty that the offer from Ryanair was ever capable of completion.

“Ryanair’s first attempt to take over Aer Lingus was prohibited in 2007 on competition grounds.  Aer Lingus is a much stronger airline today than it was at the time of the previous Ryanair offers and is Ryanair’s only significant competitor on the vast majority of Irish air routes.

“The number of routes into and out of Ireland on which Aer Lingus and Ryanair compete has sharply increased since 2007.

“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.”

As far back as last July, Clare TD Michael McNamara predicted that the takeover would be blocked.

“We can’t prejudge the decision but given the issues that have been raised around the existing Ryanair ­shareholding in Aer Lingus, it’s very hard to see how the purchase would be approved.”

Late last year, the Government announced that it wouldn’t sell the State’s 25% stake in Aer Lingus and at that time, Shannon-based Councillor Sean McLoughlin said a Ryanair take over would have serious consequences.

“Heathrow slots are very valuable, you can only buy them through the ‘Grandfather’ system, so that if you have slots you have first pick on them. Most airlines want to fly through Heathrow and some of them who want to increase their business would have to pay very dearly for them.

“Ryanair only fly into airports that aren’t in the centre of cities, airports that are miles away from cities, really. That’s the first thing Michael O’Leary would sell and he’d be hoping to make a huge chunk of money back by selling the slots.

“If Ryanair takes over Aer Lingus, Shannon will definitely lose its Heathrow slots. When we lost the slots before, we lost a huge amount of traffic. Business people use Heathrow as a connecting airport as well as everyone else. It is a huge hub and this is something we fought for.”