EU blocks Aer Lingus takeover bid

The European Commission has announced it is blocking Ryanair?s takeover bid for Aer Lingus.

The commission said the merger would harm consumers by creating a dominant company on 46 routes where both airlines operate.

Ryanair has vowed to appeal the commission?s decision to prohibit its €694 million bid for Aer Lingus.

The low cost carrier has described the commission?s stance as ?political? and ?untenable? and said its remedies package, which included two upfront buyers for half of Aer Lingus? short haul business, was ?historic and unprecedented?.

Ryanair said in a statement that the decision by the commission ?conclusively proves that this prohibition is a ?political? decision to pander to the vested interests of the Irish Government, a minority 25 per cent shareholder in Aer Lingus?.

The European Commission also prohibited Ryanair?s first offer for Aer Lingus in June 2007.

Minister for Transport Leo Varadkar welcomed the decision. ?This decision supports the Government?s view that a merger would be bad for competition in the Irish aviation market. Following detailed consideration of the proposal, the Government?s strongly held view is that a takeover of Aer Lingus by Ryanair would have a significant detrimental effect on competition, connectivity and employment in the Irish market,? he said.

?Similar to my own view, the commission considered that the remedies proposed by Ryanair were insufficient to address the competition concerns. The commission concluded that the merger would `have harmed consumers?, reduced choice and would be likely to increase prices for consumers travelling into and out of Ireland.?