EU widens Ryanair probe for Aer Lingus

City A.M. Reporter
Europe's competition regulator has launched an in-depth review of Ryanair's latest bid for Irish rival Aer Lingus, signalling the budget airline may have to make big concessions to ease competition concerns or face fresh failure.

Ryanair, which already owns 30 per cent of Aer Lingus, had an initial bid turned down by the European Commission in 2007 and dropped a second offer in 2009.

Analysts and investors view its latest €700m (£442m) bid as a long shot – as is clear from Aer Lingus's shares trading well below the bid price. But the prospect of gaining access to Aer Lingus's slots at premium airports is enough for Ryanair to fight hard for a deal.

The European Commission said today it was launching an in-depth review of the bid after a preliminary investigation suggested competition concerns remained, or had even intensified, since it last looked at the matter.

"On a large number of European routes, mainly out of Ireland, the two airlines are each other's closest competitors and barriers to entry appear to be high. Many of these routes are currently only served by the two airlines," the European Union's executive body said in a statement.

"The takeover could therefore lead to the elimination of actual and potential competition on a large number of these routes," it said, adding the number of routes where both Ryanair and Aer Lingus operate had increased since 2007.