O'Leary flies off the handle at Competition Commission

Ryanair's O'Leary has threatened the UK's competition authority with the Court of Appeal if it forces the airline to sell its stake in Aer Lingus.

by Emma Haslett
Last Updated: 29 Jul 2013

Generally, chief execs don’t tend to be comfortable flinging accusations of potentially 'unlawful' behaviour at the government – but Michael O’Leary has no such foibles. Ryanair’s outspoken chief exec has accused the UK’s Competition Commission of contradicting its Brussels overlords after the body said the airline’s 29.8% shareholding in rival airline Aer Lingus ‘obstructs’ Aer Lingus’ ability to merge with another airline, raise capital or sell slots at Heathrow Airport.

The statement by the Competition Commission was part of initial findings from an investigation into competition between the two airlines published this morning. The report itself isn’t due to come out until July – at which point the commission will decide whether Ryanair should be made to sell part of or its entire stake, or be forced to submit to ‘behavioural remedies’ (sounds ominous). But this morning’s statement was enough for O’Leary, who responded by accusing the competition commission of contradicting its EU bosses.

In a statement, he cites a February 2013 report by the EC showing that competition between the two airlines has ‘intensified’ since 2007, before pointing out that ‘the UK CC has a duty of "sincere co-operation" (his italics, not ours) with the EU, and cannot contradict or reach difference conclusions to the European Commission’s findings’. He then threatens the competition commission with legal action if it ‘should… maintain this untenable position in its final decision’.

O’Leary’s ire is understandable: he was one of a group of airline entrepreneurs who demanded a Competition Commission investigation into British Airways on its takeovers of/mergers with BMI, Iberian and Vueling over the past couple of years – which failed to produce much in the way of action. And this investigation has been dragging on for six years, frustrating any plans he might have to launch a full takeover bid for Aer Lingus.

But his claim that, because the two companies are Irish, this has nothing to do with British consumers anyway, is more spurious: after all, we’re just as likely to be caught out by Ryanair’s credit card/seat booking/insurance/baggage charges as anyone else.

The chances of either side backing down on this are slim: best to bow to the inevitable and settle down for a long, dramatic court battle. We’ll bring the popcorn.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today