The EU has blocked Ryanair's bid for rival Irish carrier Aer Lingus.
It said the proposed merger would have combined the two leading carriers in Ireland which currently "compete vigorously against each other."
Michael O'Leary, ceo of Ryanair, who held a press conference in Brussels the day before the EU announcement, had called the expected decision "not just unprecedented, but in our view unlawful."
In its ruling, the EU said that if it had gone ahead, the two carriers would have accounted for "around 80%" of all traffic out Ireland to European destinations.
It added that a merger would have "harmed consumers" by removing competition and "creating a monopoly or a dominant position on 35 routes operated" by the two airlines.
"This would have reduced choice and, most likely, led to higher prices," the EU said.
Remedies offered by Ryanair to off set the effect of the take over were "inadequate to remove competition concerns."
In particular the number of "slots" offered was "not likely" to lead to competition to replace that lost through any merger.
Mr O'Leary said the EU decision reversed 20 years during which it had approved all mergers, including that of Air France and KLM.
He said the decision was "unjustified" on competition grounds because Ryanair and Aer Lingus accounted for just 5% of the EU air travel market.
Mr O'Leary also accused the EU of making a "politically motivated" decision to appease the Irish government which owns a stake in the carrier - a charge the EU denied.
He said that Ryanair, which owns a 25% stake of Aer Lingus, would appeal against the decision in the European Court of First Instance.
It would also fight any attempt to force it to dispose of its stake.
Aer Lingus, however, welcomed the EU decision on Ryanair's "hostile" bid.
In a statement it said: "The prohibition decision…is good news for Aer Lingus and for our customers.
"Consumer choice is at the core of every competitive market and the creation of one dominant player out of Ireland, despite the protestations of Ryanair, just cannot be in the interests of consumers."
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