Consumer regulators in the UK have put Ryanair on the defensive after opening an investigation into the Irish budget carrier's shareholding in Irish flag-carrier Aer Lingus.
Ryanair has a 29.8% stake in Aer Lingus and the Office of Fair Trading is inquiring whether the acquisition has resulted in a reduction in competition.
It is to assess whether it has jurisdiction to review Ryanair's share acquisition as a 'relevant merger' situation.
This situation occurs when a minority shareholder is able to influence substantially the strategic direction and commercial objectives of a company, albeit at a lower level of control than that tested under European Union merger regulations.
If the Office concludes that it has the relevant jurisdiction, it intends to decide whether the acquisition should be referred formally to the Competition Commission.
Aer Lingus has welcomed the investigation. It has tried, unsuccessfully, to shrug off Ryanair since the budget carrier picked up a minority stake in Aer Lingus four years ago as part of a takeover bid.
The takeover failed, after falling foul of European Commission regulations, as did a second attempt to acquire the airline two years later.
But Aer Lingus has also failed to secure an order for Ryanair to divest its stake, resulting in a stalemate between the two airlines.
With the Commission investigations having ended, the Office of Fair Trading says it is taking the opportunity to consider the situation.
It has written to Ryanair seeking information and invited comments from third parties, setting a deadline of 12 November for submissions.
Ryanair confirms that it has been contacted by the Office but is insisting that - even if it had jurisdiction - the investigation is already "legally out of time".
The budget carrier also claims that the European Commission investigations have already "conclusively ruled" that Ryanair does not have influence or control over Aer Lingus.
It adds that the inquiry would set an "alarming precedent" given the late timing, the previous European investigation, and the fact that neither of the airlines is based in the UK.
Ryanair chief Michael O'Leary says the carrier is "surprised" at the Office decision, adding: "We have asked our lawyers to liaise directly with the Office to bring this out-of-time and unnecessary query to an early conclusion."
Source: Air Transport Intelligence news
