Ryanair still faces having to sell down its stake in Aer Lingus, the Competition and Markets Authority provisionally ruled today.
The Irish low-cost carrier had argued in February that the ruling made in August 2013 ordering it to reduce its 29.8% stake in its rival to 5% was out of date and there had been material changes since then after a takeover bid from International Airlines Group for Aer lingus.
Having received submissions, the CMA’s inquiry group of independent panel members “decided that there is no material change in circumstances or special reason not to proceed to implement the remedies”.
The CMA said it will now consider further responses before taking its final decision.
Simon Polito, chairman of the Ryanair/Aer Lingus inquiry group, said: “Our provisional view is that the circumstances around IAG’s proposed bid are consistent with the findings in our report.
“As the decisions in our report made clear, without any action to reduce its shareholding, Ryanair would remain a significant hurdle to any merger because it has an incentive as a competitor of Aer Lingus and, by its shareholding, the ability to hinder Aer Lingus from implementing its own commercial strategy.
“We have carefully considered submissions from Ryanair and others and taken into account all the relevant circumstances, including the fact that the IAG bid is conditional on receiving an irrevocable commitment from Ryanair.
“Having done so, our provisional view is that neither recent events nor the time that has passed since our final report are reasons not to implement the divestment remedy.”
Ryanair will once again explain why it should revoke the divestment order ahead of the CMA’s final decision, expected next month.
The airline’s lawyers are also seeking permission to appeal to the UK Supreme Court.
A spokesman said: “The CMA’s provisional decision on Ryanair’s request for a review of its final report – ordering a divestment of Ryanair’s 29.8% minority stake in Aer Lingus – is manifestly wrong.
“Given that the only basis for the CMA’s original divestment ruling was that Ryanair’s minority shareholding was or would prevent other airlines making an offer for Aer Lingus, the recent offers by IAG for Aer Lingus totally disprove and undermine the bogus theories and unsubstantiated evidence on which the CMA’s final report was based.
“The CMA speculated in its August 2013 Final Report that Ryanair’s 29.8% shareholding would deter other airlines from merging with or bidding for Aer Lingus.
“Clearly, IAG’s recent offers prove that the CMA’s findings were wrong, that circumstances have changed, and that the divestment remedy must be revoked in light of this compelling evidence.”