Low-cost airline Ryanair got a telling off yesterday over its bitter spat with Irish rival Aer Lingus. The UK's Court of Appeal told Ryanair it had to sell most of its 29% stake in Aer Lingus, though it stopped short of telling it to say sorry for its repeated takeover attempts or to share its toys.
Ryanair has tried to acquire controlling stakes in Aer Lingus three times since Ireland's national carrier floated in 2006, but has been consistently thwarted by UK and EU authorities on competition grounds. In 2013 the Competition Commission (now the Competition and Markets Authority or CMA) ordered it to reduce its stake in Aer Lingus to a poxy 5%, a decision upheld by yesterday's ruling.
Chief executive Michael O'Leary has appealed to higher courts at every stage, and has lost every time. Anyone would think a major airline owning a large stake in its main national rival violates some form of anti-trust principle or something.
Ryanair's reaction to the ruling was characteristically toys-out-of-pram. 'This judgment ignores the fact that the CMA’s Final Report was based on fanciful hypotheses, secretive "evidence" and unsubstantiated assumptions,' said the firm's comms chief Robin Kiely. 'As such, we have instructed our lawyers to appeal this ruling to the UK Supreme Court.'
The low cost carrier has a month to convince the Supreme Court to hear the appeal, and is taking a bold approach. The Court of Appeal decision, it says, 'raises human rights issues of significant public importance, including the scope of protection offered to businesses by the right to property'. Because competition authorities have never heard that one before.
If the Supreme Court decides that its human rights haven't in fact been violated (how can something that is not human have human rights, MT wonders?), Ryanair will be forced to get rid of 24% of Aer Lingus, which plays right into the hands of playground rival IAG.
The BA-Iberia owner recently upped its 2014 bid for Aer Lingus to €1.35bn (£1bn), which Ryanair argues disproves the CMA's argument that its stake deters potential takeovers. The success of IAG's bid currently depends on the agreement of both Ryanair (fat chance) and the Irish government, which holds a 25% stake. If Ryanair has to sell, getting the bid approved becomes a whole lot easier.
O'Leary has said Ryanair's stake is for sale, but he clearly isn't happy being forced into it. Ryanair doesn't have to sell while an appeal is being considered, so it's possible he wants to use the extra time to fight or delay the IAG bid to get better terms. On the other hand, maybe 'Europe's favourite airline' just doesn't like to lose.