Ryanair may have to sell stake in Aer Lingus

Ryanair is under pressure from the UK's Competition Commission to sell its interest in Aer Lingus.

The commission found that allowing Ryanair to maintain its 29.8% stake in the Irish rival could reduce competition on routes between the UK and Ireland.

The watchdog said while Ryanair does not have full control, its minority shareholding could influence the strategic decisions that could be crucial to Aer Lingus's future as a competitive airline.

"We were particularly concerned about Ryanair's influence over Aer Lingus's ability to be acquired by, merge with, or acquire another airline," said the Commission's Deputy Chairman, Simon Polito.

"We thought it likely that such a combination would be necessary to increase Aer Lingus's scale and achieve synergies and allow it to remain competitive in future."

Ryanair's Chief Executive Officer, Michael O'Leary, described the commission's ruling as "bizarre and manifestly wrong".

He said competition between Ryanair and Aer Lingus had intensified since 2007, based on a February 2013 report by the European Commission.

The European Commission rejected Ryanair's third attempt to take over Aer Lingus in February, saying a merger would have harmed consumers and led to increased prices for passengers.

The Competition Commission's final decision is due in July.

Ryanair has said it will appeal if the commission's decision is unchanged.

RD