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Last Updated: Tuesday, 26 June 2007, 13:53 GMT 14:53 UK
Ryanair attacks Aer Lingus block
Ryanair boss Michael O'Leary
Michael O'Leary is not one to shy away from a boardroom battle
Michael O'Leary, the boss of low-cost airline Ryanair, has said that the European Commission would be unlawful to halt a bid for Ireland's Aer Lingus.

The Commission is widely expected to reject Ryanair's 1bn (1.5bn euros) takeover of Aer Lingus either on Wednesday or next week, analysts said.

Mr O'Leary said the move would be "unlawful" and "unprecedented".

The Commission said that it had to be "completely impartial and objective" when assessing a takeover approach.

Concentration

Regulators are concerned that a merger of Aer Lingus and Ryanair would put too much traffic from Dublin airport in the hands of one airline.

Mr O'Leary claims that a merged company would account for about 5% of total traffic in Europe, and the merger would not put off other airlines from flying in and out of Dublin.

He called on the Commission to explain how it could approve mergers between larger carries such as Air France and KLM when they controlled far larger portions of traffic.

It would be the first time in two decades that an airline takeover has been blocked by European regulators.

'Lashing out'

Ryanair first tabled its bid last year, and has built up a 25% stake in Aer Lingus. The Irish government has a 28% stake in Aer Lingus and has refused to sell.

Aer Lingus rejected the takeover offer last year saying it was too low and was simply aimed at eliminating Ryanair's rival.

The formerly state-owned Aer Lingus has had to revamp its business after a number of problems, but said it was now confident it had a plan that would ensure steady growth.

We are confident the European Court will overturn this bizarre, illogical, manifestly inaccurate and untenable prohibition
Michael O'Leary, Ryanair

"Michael O'Leary has sought to 'take out' his closest competitor and he has failed," said Aer Lingus chief executive Dermot Mannion.

"He is now lashing out in a vain attempt to disguise that failure."

Court appeal

The Commission explained that it had to be "completely impartial and objective" when weighing up the merits of any takeover.

"This is the first time that we have been looking at a proposed merger where the two airlines operate out of the same home base airport," said Jonathan Todd, the European Commission's competition spokesman.

Mr O'Leary said on Tuesday that he would appeal against the decision should Ryanair's bid be blocked.

"The court has overturned several Commission prohibitions and we expect it will do so again in this case," said Mr O'Leary.

"We are confident that the European Court will overturn this bizarre, illogical, manifestly inaccurate and untenable prohibition."


SEE ALSO
Ryanair hit by hub airport strike
15 Jun 07 |  Business
Ryanair buys 27 new Boeing planes
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Ryanair contests Charleroi ruling
25 May 04 |  Business
Ryanair sees profits soar by 30%
05 Feb 07 |  Business
Aer Lingus rejects Ryanair's bid
03 Nov 06 |  Business

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