Ryanair loses European court battle over Aer Lingus takeover

Ryanair was dealt a blow yesterday after a European court refused to overturn a ban on it buying a rival, Aer Lingus.

The General Court backed the European Commission's decision to step in and block Ryanair from launching a full takeover bid for Aer Lingus four years ago.

The no-frills Irish airline headed by Michael O'Leary released a statement saying it noted the court's decision to reject its appeal and "is currently studying the details of this 125-page judgment".

Despite the setback, Mr O'Leary said the ruling "will not prevent Ryanair making a future offer" for its rival. "Obviously any such offer will have to take account of the court's detailed ruling." There are no current plans for a third offer, Mr O'Leary added, as any such bid was likely to fail unless the Irish government decides to sell its 25 per cent stake in Aer Lingus.

The European Commission blocked Ryanair's offer for Aer Lingus in 2006, saying the move would harm consumers by creating a dominant airline in Ireland.

"This would have reduced choice and, most likely, led to higher prices for more than 14 million EU passengers using these routes to and from Ireland each year," it said at the time.

The court handed down some positive news for the airline, as it confirmed a commission ruling that it can retain its 29.8 per cent holding in Aer Lingus. Mr O'Leary welcomed the decision, saying it was "the third time since 2007 that Aer Lingus has lost appeals on the issue". He added his regret that since Ryanair's approach for the business, "Aer Lingus has become a small, peripheral regional airline with declining traffic, fleet, jobs and is reporting substantial losses".