Ryanair offers Flybe £85.8m concessions for Aer Lingus takeover approval

Written on:February 5, 2013
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Ryanair offers concession package to Flybe

Will Ryanair’s offer to Flybe be accepted by the loss-making carrier?

Ryanair-Aer Lingus takeover bid has taken a new turn with Ryanair offering €100m (£85.8m) to Flybe airline to operate around 43 of Aer Lingus short-haul routes out of Ireland, in an effort to gain regulatory approval from the European Commission to buy out the Irish carrier. Flybe has confirmed that Ryanair has also offered as many as 10 aircrafts to one of Flybe’s subsidiary, in case the Ryanair-Aer Lingus bid gains approval.

The Flybe subsidiary would operate 40% of Aer Lingus’s short-haul routes, so as to prove that passengers would have a choice of airlines with a secure future when flying between Ireland and the UK, thus, eliminating concerns over lack of competition.

The offer by Ryanair would benefit the loss-making regional airliner Flybe that operates about 180 routes from 65 European airports. The news shot up Flybe shares which rose 5% to 48p in early trading, while Ryanair was unchanged at €5.62 (£4.82). Ryanair is leaving no stone unturned in its third attempt to acquire Aer Lingus. The latest attempt has been objected by European Commission on competition grounds arguing that the Ryanair-Aer Lingus bid creates monopoly on about 46 routes, and antitrust problems on 20 other routes.

The EU antitrust authority has asked rivals and interested parties to respond to Ryanair’s latest concession offer, the responses are expected to come on Thursday. The European Commission has set itself a deadline of March 6 to review Ryanair’s €694m (£595.6m) bid to takeover Aer Lingus.

Last month, Ryanair put forth a package of concessions intended to address the competition concerns, including Flybe acquiring Aer Lingus operations on 23 routes, where monopoly is feared.

     

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