Watchdog may force Ryanair to cut Aer Lingus stake

The UK’s Competition Commission said in provisional findings that Ryanair’s 29.8 per cent shareholding in Aer Lingus was likely to “weaken its main competitor” and could hold it back from remaining competitive by threatening to block any merger or acquisition deals with other airlines. Ryanair boss Michael O’Leary vowed to appeal any final decision that it will have to reduce its stake in Aer Lingus, claiming the initial findings were “bizarre and manifestly wrong”.

The commission is considering whether Ryanair, which has held a stake in Aer Lingus for six-and-a-half years, should cut its holding to below 25 per cent to reduce its influence on the Irish rival and is seeking views on appropriate levels.

The commission is particularly concerned that Ryanair could prevent Aer Lingus from joining forces with other airlines to increase its scale and competitiveness, while also potentially blocking moves to raise capital from shareholders or selling valuable take-off and landing slots at Heathrow. It is expected to publish its final report by July 11.