Aer Lingus welcomed a court victory Tuesday that permits British authorities to keep investigating Ryanair over its ownership of a 30 percent stake in Aer Lingus, a sore point between Ireland's two major carriers.
Ryanair sought to block the probe into whether its status as the No. 1 shareholder in Aer Lingus represents a threat to competition on British-Irish air services. Ryanair lawyers argued that Britain's Office of Fair Trading had no jurisdiction to investigate two Dublin-based airlines, and that the probe launched in 2010 came too late.
But the Court of Appeal in London sided with the Office of Fair Trading and Aer Lingus, which wants Ryanair to be forced to sell. Ryanair built its stake as part of a hostile 2006 takeover bid that was blocked both by European Union regulators and Ireland's government, which retains a 25 percent stake.
Ryanair said it would appeal Tuesday's judgment to the UK Supreme Court.
Ryanair chief executive Michael O'Leary says he expects eventually to purchase the government's stake to take control of Aer Lingus because of Ireland's rapid descent to the brink of bankruptcy, culminating in a 2010 international bailout. Ireland insists it won't sell its shares because an Aer Lingus-Ryanair merger would stifle competition on Ireland's air links to Europe.
Aer Lingus accuses Ryanair of being a disruptive presence inside the company since its surprise takeover bid was thwarted. The aggressive no-frills carrier has repeatedly criticized Aer Lingus' handling of costs, labor relations and corporate governance but does not have any votes in the boardroom.
Aer Lingus chief executive Christoph Mueller said he hoped the Office of Fair Trading soon would order Ryanair to dispose of an investment that runs "contrary to the interests of consumers and the majority of our shareholders."
"It is unacceptable that our principal competitor has been allowed to remain as a significant shareholder on our share register even though the European Commission blocked their hostile takeover almost 5 years ago," Mueller said. "This intolerable situation cannot be allowed to continue and today's judgment confirms that the OFT has the jurisdiction to investigate the anti-competitive effects of Ryanair's minority shareholding in Aer Lingus."
The Office of Fair Trading declined to comment.
Office of Fair Trading probe, http://bit.ly/c8RIj3
Aer Lingus corporate, http://bit.ly/Li9EGR
Ryanair corporate, http://bit.ly/khcsQ5
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