LEAKED EU FINDING BIZARRE
Ryanair Holdings PLC
30 March 2007
RYANAIR DESCRIBES LEAKED EU FINDING AS BIZARRE, UNPRECEDENTED AND POLITICALLY
MOTIVATED
Following the leak of confidential material to a media source in Brussels,
Ryanair, Europe's largest low fares airline today (Friday, 30th March 2007)
seriously questioned the European Commission's latest comments on its Aer Lingus
bid. The airline also criticised the leaking of this confidential report to the
media. Ryanair stated that these findings run contrary to the European
Commission's stated policy of supporting airline consolidation, are not
supported by evidence, and are bizarre from a Commission which has previously
approved mergers between Air France and KLM, Lufthansa and Austrian, and
Lufthansa and Swiss Airlines. These findings fly in the face of these EU airline
precedents, and are clearly designed to appease the political interests of the
Irish Government, rather than advancing the interests of Irish consumers and
visitors.
Ryanair said that the EU's findings which suggested that a merger between Aer
Lingus and Ryanair 'is likely to significantly impede effective competition' are
unsupported by the facts in this case which include Ryanair's commitments to;
1. Reduce Aer Lingus's fares each year for a four year period.
2. Reduce Aer Lingus's fuel surcharges.
3. Improve Aer Lingus's fleet and product.
4. Significantly reduce Aer Lingus's cost base.
Ryanair firmly believes that the measures proposed for Aer Lingus will generate
substantial savings which will be passed on to consumers, because they will lead
to reduced prices, improved services, as well as providing Aer Lingus with a
strong financial partner. No such commitments were given in the far larger Air
France-KLM takeover which was approved by the Commission and has since seen
large fare increases and fuel surcharges. At a time of increasing EU airline
takeovers and consolidations, these bizarre findings fly in the face of all
precedent decisions in the European airline industry and also run counter to the
inevitable wave of further consolidations which EU-US Open Skies will bring
about.
Ryanair's Spokesman, Peter Sherrard, today said:
'These findings by the European Commission are clearly politically
motivated. It is untenable for DG Competition - which has previously
approved the €3.8bn Air France takeover of KLM, and the Lufthansa takeovers
of Swiss and Austrian Airlines - to suggest that the much smaller Ryanair
takeover of Aer Lingus will impede effective competition, when Ryanair has
already offered to guarantee fare reductions, fuel surcharge reductions and
improved services. These findings also fly in the face of the wave of
national consolidations which have and continue to take place across Europe
and have seen:
a. •Ryanair previously acquire Buzz in the UK.
b. •SN Airlines acquire Virgin Express in Belgium.
c. •Air Berlin buy Deutsche BA in Germany.
d. •BA dispose of BA Connect to FlyBe in the UK.
e. •Air Berlin buy LTU in Germany.
f. •Tap buy Portugalia in Portugal.
'At a time when British Airways is considering purchasing BMI, when Iberia
is the subject of takeover approaches from British Airways, Air France and
Lufthansa, when Alitalia is the subject of takeover approaches by Lufthansa
and Air France, the suggestion that two Irish airlines - which combined,
account for less than 5% of EU air travel - should not be allowed to merge
is a bizarre and clearly political, rather than a competition position.
'It is clear that the EU Competition Commission is applying a different and
unique standard to the Ryanair-Aer Lingus offer which flies in the face of
all previous decisions and runs contrary to the wave of mergers and
takeovers which is now in train following EU-US Open Skies. EU-US Open Skies
opens both Ryanair and Aer Lingus to the possibility of far more intense
competition at Dublin from major American airlines. Aer Lingus needs to find
a strong financial partner if it is to compete effectively against the US
and European mega carriers. Ryanair can provide that strong financial
partner, at a time when Aer Lingus has withdrawn from BA's One World
Alliance.
'It is unfair of the European Commission to apply different rules and a
different standard to Ryanair's merger with Aer Lingus than it previously
applied in the larger Air France or Lufthansa mergers. How can the European
Commission subsequently approve takeovers of Iberia or Alitalia, when it
makes what is clearly a politically motivated decision to block Ryanair's
much smaller offer for Aer Lingus? It appears that yet again the European
Commission has one set of rules for flag carrier airlines, and a different,
unique set of rules for efficient low fare airlines like Ryanair. We call on
the European Commission to stop this politically motivated interference in
the Ryanair-Aer Lingus offer, and apply its own competition rules fairly.
This merger should be approved without further delay or interference, as
part of the continuing wave of European airline consolidation'.
Ends. Friday, 30th March 2007
For reference: Pauline McAlester
Murray Consultants
Telephone: +353 1 498 0300
The directors of Ryanair accept responsibility for the information contained in
this announcement, save that the only responsibility accepted by the directors
of Ryanair in respect of the information contained in this announcement relating
to Aer Lingus and the Aer Lingus Group, which has been compiled from published
sources, has been to ensure that such information has been correctly and fairly
reproduced or presented (and no steps have been taken by the directors of
Ryanair to verify this information). To the best of the knowledge and belief of
the directors of Ryanair (who have taken all reasonable care to ensure that such
is the case), the information contained in this announcement for which they
accept responsibility is in accordance with the facts and does not omit anything
likely to affect the import of such information.
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