Ryanair is to appeal a ruling ordering it to reduce its stake in fellow Irish carrier Aer Lingus to 5%.
The Competition and Markets Authority (CMA) has ordered the budget airline to reduce its 29.8% stake following a takeover by BA parent IAG having been approved by the Irish government.
Ryanair said in a statement: “Today’s CMA decision rejecting Ryanair’s request to review its order to divest Ryanair’s 29.8% minority stake in Aer Lingus is manifestly wrong and flies in the face of the current IAG offer for Aer Lingus.
"When the only basis for the CMA’s original divestment ruling was that Ryanair’s minority shareholding was or would prevent other airlines making an offer for Aer Lingus, the recent offers by IAG for Aer Lingus totally disprove and undermine the bogus theories and invented evidence on which the CMA based its untenable divestment ruling."
Ryanair said it has instructed its lawyers to appeal "today's ridiculous decision" to the Competition Appeal Tribunal, claiming it was "factually unsustainable and legally flawed."
The €1.4 billion IAG deal hinges on Ryanair’s shareholding in Aer Lingus.
The CMA said it had decided that there is “no material change” in circumstances or special reason for it not to require Ryanair to reduce its shareholding in Aer Lingus to 5%.
Ryanair had called on the CMA to re-examine its decision to require the airline to sell its stake in Aer Lingus in February. This followed a judgment from the Court of Appeal dismissing Ryanair's legal challenge to the original decision made in 2013.
Simon Polito, chairman of the CMA’s Ryanair/Aer Lingus inquiry group, said: "IAG's bid for Aer Lingus is dependent on securing Ryanair's agreement to sell its shareholding. This recent development illustrates that Ryanair can decide whether a bid for its major competitor on UK/Irish routes succeeds or fails.
"This concern was an important part of our decision to require Ryanair to reduce its shareholding. It's not good for competition when one company holds such an influence over the future of one of its major competitors.”
He added: "Although at this point Ryanair has yet to decide whether to sell its shares to IAG, we need to ensure that, whatever happens in relation to this particular transaction, Ryanair's ability to hold sway over Aer Lingus is removed.
"It is clear that the timing of IAG's bid has been influenced by the prospect of Ryanair being forced to sell the majority of its shareholding.
“IAG has said that it would not be interested in acquiring any airline with a significant minority investor. The conditional nature of IAG's bid is consistent with this and our original assessment that Ryanair's presence was likely to deter other airlines from entering into, pursuing or concluding combinations with Aer Lingus.
"In our view the circumstances of the IAG bid and other issues raised by Ryanair do not amount to a material change in circumstances or special reason not to take action to remedy the substantial lessening of competition identified in our 2013 report.
"We will liaise closely with other authorities to ensure that our requirement for Ryanair to reduce its stake in Aer Lingus works effectively alongside shareholders' consideration of the IAG bid and assessment of the bid by the European Commission."
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