Ryanair told to dump the majority of its stake in Aer Lingus

The Competition Commission has told Michael O'Leary to reduce Ryanair's stake in Aer Lingus, but the chief executive has vowed to appeal

by Gabriella Griffith
Last Updated: 04 Sep 2013
Ryanair has been ordered to reduce its stake in Irish airline Aer Lingus by the Competition Commission; it has said the no-frills airline must reduce its 29.8% stake to just 5%. The demand comes in the commission’s final report, stating that Ryanair’s ownership of such a large chunk of its rival, ‘substantially lessens’ competition on the routes between the UK and Ireland.
 
It’s an ongoing saga, which is surely giving rambunctious Ryanair chief executive Michael O’Leary a massive headache - he has battled to own all of Aer Lingus for years. The Irish airline boss has vowed to appeal against the decision, calling the decision ‘bizarre and manifestly wrong.’
 
‘While Ryanair is one of the UK’s largest airlines, Aer Lingus has a tiny presence in the UK, serving just 6 routes to the Republic of Ireland, a traffic base that has declined over the past 3 years and now accounts for less than 1% of all UK air traffic,’ argued O’Leary.
 
‘This case, involving two Irish airlines where one (Aer Lingus) accounts for less than 1% of the UK’s total air traffic and concerns very few UK consumers, is yet another enormous waste of UK taxpayer resources from a body which took no action whatsoever when the two main UK airlines (BA and bmi) merged. It would appear to be a case of one rule for the UK airlines but an invented set of rules for two Irish airlines.’
 
O’Leary’s utter determination is impressive. Many would have thrown the Aer Lingus towel in long ago. But like a dog with a bone, the Irish airline boss will continue to fight. Although some might argue, his notorious desire to hit the headlines is served pretty well by this quarrel.
 
Ryanair isn’t the only company with a competition clash today; Google is also facing its own battle, but this time with the Office of Fair Trading (OFT).  The $1bn acquisition of Israeli startup, Waze, by the search engine colossus, is being scrutinised by the OFT.
 
Waze, is a mapping service which uses crowdsourcing to give users real time updates such as traffic information. Google bought the company in June of this year, but its announcement it would be integrating traffic data from Waze into its maps, have pricked up the ears of the UK’s competition watchdog. The OFT has said if Waze’s UK turnover exceeds £70m a year or if the two companies serve 25% of the same goods in the UK – it will need at act.
 
The purchase is already under investigation by the US Federal Trade Commission. The OFT will need to decide over the next 40 working days whether or not to investigate further.
 
MT doubts Google is shaking in its boots, the search engine giant has its ‘Waze’ of getting around these things…

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