Ryanair told to cut Aer Lingus stake by Competition Commission

Ryanair has made several attempts to take over Aer Lingus

Ryanair has been told to reduce its stake in rival Irish carrier Aer Lingus by the UK Competition Commission.

It said the no-frills airline would be required to reduce its 29.8% stake in Aer Lingus to 5%.

The commission's final report confirmed its provisional findings that Ryanair's shareholding could "substantially lessen" competition on routes between the UK and Ireland.

Ryanair said it would appeal against the conclusions of the commission.

Ryanair chief executive Michael O'Leary said: "The report by the UKCC is bizarre and manifestly wrong but also entirely expected."

Mr O'Leary said that the investigation into Ryanair's stake in Aer Lingus was "manifestly unfair" and that the company's lawyers would lodge an appeal with the Competition Appeal Tribunal in the coming weeks.

Ryanair has made repeated attempts to buy Aer Lingus, which said it "welcomes" the Competition Commission's report.

Aer Lingus chairman Colm Barrington said: "The Competition Commission should be commended on its thorough investigation."

He added: "It was unacceptable that our principal competitor was allowed to remain on our share register with a shareholding of 29.8% and interfere with our business despite the European Commission blocking both Ryanair's first hostile takeover attempt six years ago and its most recent hostile takeover attempt earlier this year."

Simon Polito, the Competition Commission deputy chairman, said that there was a "tension" between Ryanair's position as a competitor and largest shareholder in Aer Lingus, and that Ryanair "has an incentive to weaken its rival's effectiveness as a competitor".