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The Competition Commission (CC) today issued for public consultation a draft final Order setting out how it intends to implement the remedies set out in the Ryanair / Aer Lingus final report.

In its final report published in August, the CC decided that Ryanair’s minority shareholding in Aer Lingus had led or may be expected to lead to a substantial lessening of competition between the airlines on routes between Great Britain and Ireland.

As a result the CC requires Ryanair to sell its minority shareholding 29.8 per cent stake in Aer Lingus down to 5 per cent. As part of the remedy process a Divestiture Trustee should be appointed from the outset to sell the Divestment Shares to suitable purchasers.

The CC recognises that Ryanair has appealed the CC’s decision to the Competition Appeal Tribunal (the Tribunal) and is still awaiting the outcome. The CC does not expect to make the Final Order seeking to implement the divestiture while the current appeal to the Tribunal is ongoing. However, the CC sees no reason to delay consulting on the draft Final Order order as this will help ensure the CC is ready to implement the remedy if the Tribunal upholds the CC decision.

Simon Polito, CC Deputy Chairman and Chairman of the Ryanair/Aer Lingus Inquiry Group, said: “We see considerable merit in consulting on the draft Final Order at this stage to work through the detailed implementation of these measures and to avoid unnecessary delays in the event that the Tribunal upholds the CC’s final report. This is in line with our practice in other cases, for example the Payment Protection Insurance market investigation. We are now seeking comments on the draft order whilst awaiting the outcome of the Tribunal decision”.

To comment on the draft order, please email Brid.McHugh@cc.gsi.gov.uk or write (by 5pm on 4 December 2013) to:

Bríd McHugh
Ryanair/Aer Lingus inquiry
Competition Commission
Victoria House
Southampton Row
LONDON
WC1B 4AD

Notes for editors

1. The CC is an independent public body, which carries out investigations into mergers, markets and the regulated industries.

2. The members of the Ryanair/Aer Lingus Inquiry Group are: Simon Polito (CC Deputy Chairman and Chairman of the Group), Roger Davis, Carolan Dobson and Professor Michael Waterson.

3. Ryanair initially acquired a stake in Aer Lingus in late 2006. In October 2006 Ryanair launched a public bid for the remaining shareholding in Aer Lingus. The European Commission investigated the public bid and decided to prohibit it in June 2007. In July 2010, the General Court upheld the decision and ruled that the European Commission did not have the ability to examine or require divestment of minority shareholdings that do not confer ‘decisive influence’ for the purposes of the EU Merger Regulation. Ryanair’s latest bid (in July 2012) for the remaining shareholding in Aer Lingus was prohibited by the European Commission on 27 February 2013. Ryanair lodged an appeal with the General Court against this decision on 8 May 2013.

4. The Enterprise Act 2002 empowers the OFT to refer to the CC completed or proposed mergers for investigation and report which create or enhance a 25 per cent share of supply in the UK (or a substantial part thereof) or where the UK turnover associated with the enterprise being acquired is over £70 million.

5. The OFT referred the acquisition to the CC on 15 June 2012. The CC’s inquiry was extended whilst Ryanair sought to challenge the CC’s jurisdiction in view of the European Commission’s investigation of its latest bid. The Competition Appeal Tribunal (in August 2012) and the Court of Appeal (in December 2012) both dismissed Ryanair’s challenges and the Supreme Court refused it permission to appeal further in April 2013. The CC restarted its investigation in March 2013.

6. Further information on this inquiry, including the terms of reference and other key documents, as well as on the CC and its procedures, including its policy on the provision of information and the disclosure of evidence, can be obtained from the CC website at: www.competition-commission.org.uk.

7. Enquiries should be directed to Rory Taylor or Siobhan Allen or by telephoning 020 7271 0242.