Ryanair has been told by the competition watchdog to sell most of its 29.8 per cent stake in Irish airline Aer Lingus.
The Competition and Markets Authority (CMA) has ordered the low cost carrier to sell down its stake to 5 per cent.
Ryanair has said it will appeal the decision.
The ruling should make it easier for British Airways owner IAG to acquire Aer Lingus, which last month made a €1.4 billion cash offer for the Irish airline.
The CMA said it was a “concern” that one airline could decide if a bid for a competitor succeeded or failed.
Simon Polito chairman of the Ryanair/Aer Lingus inquiry group, said: “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.”
He added: “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.”
Ryanair said on Thursday that it would appeal the latest CMA ruling which it called "ridiculous" and "legally flawed".
“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,” said Ryanair spokesperson Robin Kiely.
“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 has instructed its lawyers to appeal today's ridiculous decision to the Competition Appeal Tribunal, given that it is factually unsustainable and legally flawed as the IAG offer for Aer Lingus proceeds.”
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