have not yet addressed Ryanair’s second takeover attempt due to the fact that only the first and the third bids were relevant for the purpose of my thesis. The second attempt, was in fact withdrawn by Ryanair itself after that the EU regulators launched an investigation into the hostile takeover it had commenced against Aer Lingus.
Moving on to the third attempt, on 19 June 2012, Ryanair launched its third public bid to obtain control over Aer Lingus with an all cash offer aiming at acquiring all of the airline’s outstanding shares which amounted to 70.18%. The transaction was to be completed through a wholly owned subsidiary of the airline itself, Conside Limited.
The Commission received notification of the proposed transaction on…show more content… The Commission found that Ryanair and Aer Lingus now have 46 overlapping routes to and from Dublin, Shannon, Cork and Knock airports. Out of these 46 routes, 26 had already been analysed in 2007 although there seemed to be 20 more overlaps which were cause of much distress due to the threat of competition they presented the Commission with. The Commission worried that the airline resulting from the proposed merger would have had a larger market share on most of these routes due to the exit from such routes of other competitors. Furthermore, it appeared that the proposed transaction would have create a monopoly on 28 routes, not 15 as it was in…show more content… Additionally, on the majority of the routes they are actually the only airlines operating and in these instances it is true that the airlines are each others closest competitors. Testimony of their rivalry are also their similarities in their operating systems, their high brand recognition in Ireland and the fact that they have important bases in Ireland. Thus the Commission concluded that the airlines are not only close competitors but the closest ones on some routes which could lead to the elimination of competition in the market and be detrimental for customers.
The airlines’ market position would be even stronger because if the transaction goes through, Ryanair plans on keeping Are Lingus as a separate entity in order to put a dual branding strategy in action so as to have a strong market position in both the ‘low frills low cost’ segment than on the full service market.
Furthermore, the merged entity would be a serious treat for new entrants due to the fact that there would be very high barriers of entry into the Irish air service market due to the position of the merged entity as a result of the strong position that the two airlines had pre-merger on the Irish