The UK Competition Commission said Ryanair Holdings PLC should reduce its 29.8% stake in the Irish airline company Air Lingus because it is a harm of competition as both companies operate same routes from UK to Ireland.
Ryanair is a low cost airline company – a preferable choice for passengers traveling light, has taken advantage of several collapses of regional companies and expanded to become the biggest airline carrier across Europe.
The company have declared interest in buying Aer Lingus since 2006 and have tried three times to acquire the Irish airline, all of which ending unsuccessfully.
The UK regulator reasoned that holding almost 30% of the Irish company could obstruct its possible merge with another buyer in order to increase competition. Furthermore, The Ryanair stake prevents Air Lingus from taking important decisions inside the company which is clearly an influence of policy and strategy of a competitor.
Ryanair counter that regulators thesis on the subject is “unfounded” as it pointed a report from European regulators in February which said that competition between the two parts has intensified since 2007.
Both, UK regulator and European Commission agree on the point that Ryanair stake in competitors company would result in monopoly on the market which could lead to higher prices for the passengers
The UK commissions final answer on the subject would be posted by July 11.
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