Ryanair Will Fight for Its Stake in Aer Lingus

Michael O’Leary, chief executive of the European budget airline, predicted Wednesday that the protracted dispute over its 30 percent stake in Aer Lingus would not be over soon, no matter what the final decision is next month by British regulators, whom he accused of “incompetence.”

In a preliminary finding in May, Britain’s Competition Commission said Ryanair’s stake — a legacy of three failed takeover attempts over the last six years — gave Ryanair too much influence over the strategy of Aer Lingus and threatened competition on routes between Ireland and Britain, particularly at Heathrow Airport near London.

“If they rule against us and force us to sell down, it’s inevitable that we’ll appeal it to the courts, and if they don’t rule against us or rule in our favor, Aer Lingus will appeal,” Mr. O’Leary said here at the Paris Air Show. “I think it will inevitably finish up in the courts, probably in the next four or five years.”

The British regulator is expected to make a final ruling in the case on July 11 and present a list of remedies that will probably include the sale of all or part of Ryanair’s stake.

Mr. O’Leary, who spoke with reporters after completing details of a $15.6 billion order for 175 Boeing 737 jets, criticized the British regulators, saying they had failed to consider evidence of increasing competition among airlines at Heathrow and other British airports.

“We will never surrender to bureaucratic incompetence and interference,” he said.

Ryanair is Europe’s largest airline based on the number of passengers, carrying nearly 80 million travelers a year on its fleet of more than 300 Boeing 737 aircraft. It has continued a rapid expansion throughout the economic recession, adding new routes even as higher-cost rivals have retrenched by shedding employees and reducing capacity.

Mr. O’Leary said he expected to receive the first of the newly purchased Boeing jets, all of which are 189-seat 737-800s, in September 2014. The new planes should enable an expansion of Ryanair’s share of the European air travel market to around 20 percent in five years, up from around 12 percent today, he said. That rate, if achieved, would mean 100 million passengers a year.

Ryanair is also actively negotiating an order for up to 200 of a revamped Boeing single-aisle jet, known as the 737 Max, that could be completed by the end of the year, Mr. O’Leary said. The 737 Max, which will seat up to 215 passengers and be equipped with more fuel-efficient engines, is not expected to enter commercial service until late 2017.

Separately, Airbus said here Wednesday that it had sealed a long-awaited order for 25 A350-900 aircraft from Air France-KLM worth an estimated $7.2 billion, after Rolls-Royce and the airline reached a deal over engine maintenance.

Article source: http://www.nytimes.com/2013/06/20/business/global/ryanair-will-fight-for-its-stake-in-aer-lingus.html?partner=rss&emc=rss