Ryanair criticised the European Commission’s decision as ‘political’
The European Commission said on Wednesday it had barred a third attempt by low-cost airline pioneer Ryanair to take over its Irish rival Aer Lingus due to concerns passengers would lose
out, AFP has reported.
The "merger would have harmed consumers by creating a monopoly or a dominant position on 46 routes...this would have reduced choice and, most likely, would have led to price increases for consumers," the Commission said in a statement.
It said Ryanair offered several remedies to meet these competition concerns but they "fell short" of what was needed.
Ryanair's proposals "were simply inadequate to solve the very serious competition problems which this acquisition would have created," EU Competition Commissioner Joaquin Almunia said in the statement.
Industry consolidation was welcome "so long as it is not at the expense of consumers," Almunia told a press conference, citing a series of recent Commission airline merger approvals.
Ryanair tried in 2007 to take control of Aer Lingus, in which the Irish government holds some 25 percent, but the Commission prohibited that deal on competition grounds.
The company tried again in 2009 but decided to withdraw when it became clear Brussels remained opposed.
During the attempted takeovers Ryanair built up a 30 percent stake in Aer Lingus and offered to buy out the Irish government which has consistently refused to sell.
Changes since 2007 have only reinforced the two airlines' position in the Irish market, the Commission said, adding that the proposed deal would "have removed the currently vibrant competition between" them.
"In short, customers' travelling options would have been substantially reduced and it is unlikely that competitors would have been able to sufficiently constrain the merged entity in its market behaviour. Higher prices for passengers would have been the likely outcome."
Ryanair said earlier this month that it expected to be turned down again in Brussels, and reaffirmed Wednesday it would appeal while lambasting the Commission's reasoning as politically motivated.
"Ryanair today confirmed that it will appeal the EU Commission's announced decision to prohibit its latest offer for Aer Lingus," it said.
The company insisted that its remedies addressed EU concerns.
"Ryanair's latest remedies package conclusively addressed all of the objections raised by the Commission" in 2007 and in its latest 2012 application for clearance, it added.
Aer Lingus, which has repeatedly snubbed Ryanair and argues that it is a strong standalone airline, welcomed the ruling and said it was the first time the EU had rejected a takeover deal twice.