European Commission blocks Ryanair’s proposed takeover of Aer Lingus for second time

by Reed Smith

The European Commission has prohibited Ryanair’s proposed acquisition of Aer Lingus, finding the remedies proposed by Ryanair insufficient to alleviate the substantial concerns about the merger’s impact on the market and the anticipated resultant consumer harm. This decision is the third prohibition decision by the European Commission in the air transport sector (and the second involving a proposed acquisition of Aer Lingus by Ryanair) arising from the 15 mergers and several alliances it has examined since 2004. Ryanair’s existing 29.8% shareholding in Aer Lingus remains under review by the UK Competition Commission.

The European Commission (the "Commission") has decided that Ryanair’s proposed acquisition of Aer Lingus would have harmed consumers through a reduction in choice and a likely increase in prices arising from the creation of a monopoly or a dominant position on 46 routes where Aer Lingus and Ryanair currently compete vigorously against each other.

Ryanair proposed a number of remedies to alleviate the Commission’s concerns. These included the divestiture of Aer Lingus’ operations on 43 overlap routes to Flybe and the cession of take-off and landing slots to IAG/British Airways at London airports to enable IAG/British Airways to operate on three of the relevant routes. Each committed to operate on the routes for a period of three years.

The Commission rejected these remedies and prohibited the acquisition finding that:

  • Ryanair and Aer Lingus are "by far the most important carriers out of Ireland" directly competing on 46 routes
  • The merger would have led to very high market shares on all of these 46 routes including the creation of an outright monopoly on 28 routes
  • There were very high barriers to entry in the Irish market stemming from Ryanair’s and Aer Lingus’ strong market positions and that there was "no prospect" that any new carrier would enter the Irish market after the merger
  • The remedies proposed were "simply inadequate to solve the very serious competition problems which this acquisition would have created" since Flybe was not a "suitable purchaser capable of competing sufficiently with the Ryanair/Aer Lingus merged entity" and IAG/British Airways would "not constrain the merged entity to a sufficient degree and would have little incentive to stay on the routes beyond a 3-year period."

The prohibition decision is the third prohibition out of the 15 mergers and several alliances examined in the air transport sector by the Commission since 2004. This decision as well as the two prior prohibition decisions involved two airlines having large bases at the same "home" airport. In each case this fact proved determinative in finding that the proposed merger would result in a reduction in competition.

Not only has Ryanair now been prohibited from acquiring the remaining shares in Aer Lingus, but its existing 29.8% share is also in jeopardy as it is currently being scrutinised by the UK’s Competition Commission. The Competition Commission is due to decide the fate of Ryanair’s existing share in Aer Lingus this summer. Meanwhile Aer Lingus has launched a challenge against the European Commission in the General Court of the European Union for its award of slots under the IAG/bmi commitments proceedings.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Reed Smith | Attorney Advertising

Written by:

Reed Smith

Reed Smith on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.