In February, Ryanair requested that the Competition and Markets Authority (CMA) re-examine its decision to require it to sell its 29.8% stake in Aer Lingus Group plc (Aer Lingus) down to 5%. This followed a judgment from the Court of Appeal dismissing Ryanair’s legal challenge to this decision.
Ryanair argued in particular that IAG’s proposed bid for Aer Lingus and the period of time that has elapsed since the decision was originally made by the Competition Commission in its report in August 2013, constitute a material change of circumstances and that the CMA no longer had the power to impose a divestment remedy on Ryanair.
After receiving that request, the CMA invited submissions from interested parties. After considering responses from Aer Lingus, IAG and the Irish government – and further submissions from Ryanair – the inquiry group of independent CMA panel members considering this issue has provisionally decided that there is no material change in circumstances or special reason not to proceed to implement the remedies set out in the report. The CMA will now consider further responses before taking its final decision.
The CMA is also consulting on the terms of a draft final order that would implement the remedies. In the event that it maintains its provisional decision, the CMA would expect to make a final order taking account of any comments it received on this draft final order.
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.
The provisional decision document and all information on the Ryanair/Aer Lingus inquiry can be found on the case page.