On Feb. 12, 2015, the Court of Appeal to England and Wales dismissed Ryanair’s appeal against a judgment of the UK’s Competition Appeal Tribunal (“CAT”). The CAT had, on May 7, 2014, rejected Ryanair’s application for review of the findings of the Competition Commission (“CC”) in connection with Ryanair’s acquisition of a minority shareholding in Aer Lingus. In its final report, dated Aug. 28, 2013, the CC found that Ryanair and Aer Lingus had ceased to be distinct as a result of Ryanair’s minority shareholding (29.82%) that gave it the ability to exercise material influence over the policy of Aer Lingus. The CC reached its view by having regard to Ryanair’s ability to block special resolutions and the sale of slots at London Heathrow Airport. The CC then concluded that the minority stake resulted in a substantial lessening of competition because, in particular, Ryanair’s incentives as a competitor were likely to outweigh its incentives as a shareholder. The CC decided that a reduction of Ryanair’s holding to 5% would be an effective remedy.
The Court of Appeal rejected all three of Ryanair’s challenges to the CAT’s judgment. Ryanair’s arguments concerned its procedural rights during the CC’s investigation; the proportionality of the divesture remedy; and an alleged breach of the duty of sincere co-operation contained in EU law.
Ryanair has so far launched three takeover bids for Aer Lingus: the bids made in 2006 and 2012 were prohibited by the Commission, and the bid in 2009 was withdrawn. The Commission’s second prohibition of the deal is currently on appeal to the General Court. Ryanair argued that there was a material risk of conflict between the divesture order and a future decision of the Commission—following the appeal to the General Court—permitting Ryanair to bid for 100% of Aer Lingus. The Court of Appeal held that it was arguable that the duty of sincere co-operation seeks to avoid conflicting decisions on the same subject-matter between Member States and the institutions of the EU, not the avoidance of collateral damage that is sometimes the consequence of separate hearings in relation to different competition issues affecting the same party. The Court of Appeal emphasized that the investigation by the CC concerned only the acquisition and retention of the minority stake and not the three takeover bids.
Ryanair has indicated that it will appeal the Court of Appeal’s ruling to the UK Supreme Court. In parallel, it has requested that the UK’s Competition and Markets Authority review the CC’s final report in view of discussions of a possible merger between Aer Lingus and International Airlines Group (“IAG”). IAG is the parent company of British Airways, Iberia and Vueling.
Information on Ryanair’s appeal is available here.
 Ryanair v. Competition and Markets Authority  EWCA Civ 83.
 The CC closed on Apr. 1, 2014. Its functions were transferred to the Competition and Markets Authority.
 Most of the minority stake was acquired in 2006 when Ryanair launched its first public bid to acquire Aer Lingus.