RYR TO APPEAL EU DECISION
Ryanair Holdings PLC
27 June 2007
RYANAIR TO APPEAL UNLAWFUL EU DECISION TO COURT OF FIRST INSTANCE
CALLS ON AER LINGUS TO SCRAP UNFAIR FUEL SURCHARGES
LAUNCHES 2M SEATS FOR €10 (incl. taxes & charges)
Ryanair, Europe's largest low fares airline today (Wednesday, 27th June)
confirmed that it would appeal the EU Commission's unlawful decision to prohibit
the merger with Aer Lingus to the European Court of First Instance. Ryanair
expressed confidence that this prohibition will be overturned because;
a. •This is the first time that the Commission has prohibited a merger between
two companies which combined will have less than 5 % of the EU market.
b. •This is the first time that the Commission has prohibited an airline merger
and reverses a 20 year policy of encouraging EU airline mergers, having
previously approved the larger Air France/KLM merger and the Lufthansa/
Austrian/Swiss mergers.
c. •This is the first time that an EU airline merger offered guaranteed fare
reductions of over €100m p.a. for the benefit of consumers.
d. •This prohibition leaves Aer Lingus exposed as a small, peripheral loss
making regional airline which cannot compete with Ryanair on price or
punctuality from Dublin (it has recently pulled off another 5 Ryanair routes
from Dublin) at a time when the rest of the European industry is
consolidating. Aer Lingus lost €70m last year despite an average short haul
fare of over €90 (more than double Ryanair's average fare of €41).
Ryanair confirmed that the prohibition would be bad news for Aer Lingus'
passengers who will continue to suffer higher fares, unnecessary fuel
surcharges, poor punctuality and repeated strikes (such as the latest staff walk
out just two weeks ago).
Ryanair also criticised the continuing failure of the Board and Management of
Aer Lingus to deliver value for its customers or shareholders;
1. •Aer Lingus fares are rising (in line with its IPO strategy).
2. •Aer Lingus has recently raised its unjustified fuel surcharges for long haul
passengers.
3. •Aer Lingus has wasted almost €20m of shareholders' funds to oppose a bid of
€2.80 per share when its share price is just €2.60.
4. •Aer Lingus has ordered new long haul aircraft recently when prices are at an
all time high.
5. •Aer Lingus has (since Ryanair's offer) pulled services from 5 more Ryanair
routes because it is unable to match Ryanair's punctuality or prices.
6. •Aer Lingus has supported the DAA's proposed T2 which will double passenger
charges at Dublin and substantially increase Aer Lingus' costs.
7. •Aer Lingus has presided over a decline in the share price from over €3.00 to
just €2.60 yesterday - significantly below Ryanair's offer price.
Aer Lingus' actions in recent weeks has damaged its cost base and destroyed
significant shareholder value. It would appear that the Board of Aer Lingus is
more interested in looking after its own interests and those of the Irish
Government than it is in lowering airfares or increasing its share price. In its
defence documents, Aer Lingus claimed that Ryanair's offer of €2.80 per share
'devalued Aer Lingus'. How does it now explain or justify a share price as low
as €2.60, significantly less than Ryanair's offer?
Speaking today in Dublin Ryanair's CEO Michael O'Leary said;
'Aer Lingus claimed yesterday that the EU Commission's prohibition is
'another boost for Aer Lingus and for consumers'. This is nonsense. Aer
Lingus' share price is now significantly below Ryanair's €2.80 offer
which means that their shareholders are losing out. The fact that
consumers will be denied the Ryanair guarantee of lower Aer Lingus fares
and the elimination of fuel surcharges means that they will suffer a
penalty of over €100m p.a.
'Aer Lingus is continuing to waste shareholders' money by ordering new
aircraft at the top of the cycle, by supporting expensive T2 facilities
at Dublin airport which will double their costs and by wasting almost
€20m of shareholders funds to oppose Ryanair's €2.80 offer. This waste
has been reflected in their falling share price.
'We call on Aer Lingus to lower their fares and scrap these unfair fuel
surcharges and at least deliver the same value to consumers that
Ryanair's offer would. In the mean time Ryanair will continue to grow,
will continue to offer lower fares and will continue to beat Aer Lingus
on price and punctuality. We look forward to the European Courts
overturning this unprecedented and unlawful prohibition'.
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.
Ends. Wednesday, 27th June 2007
For further information please contact:
Peter Sherrard - Ryanair Tel: 00 353 1 812 1228
Pauline McAlester - MurrayConsultants Tel: 0353 1 4980 300
This information is provided by RNS
The company news service from the London Stock Exchange
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