Ryanair's bid for Aer Lingus is to be blocked by the European Commission, a move which the Irish budget airline claims is based purely in the interests of the Irish government.

The company released a statement on Tuesday afternoon saying that it had been informed by the Commission at a 'State of Play' meeting that it intends to prohibit the offer.

This is the third attempt at a takeover by Ryanair, which already owns 30% of Aer Lingus. Ireland, meanwhile, holds a 25% interest in Aer Lingus and the government has been vocal about worries over competition.

"It appears clear from this morning's meeting, that no matter what remedies Ryanair offered, we were not going to get a fair hearing and were going to be prohibited regardless of competition rules," said Robin Kiely, the Head of Communications at Ryanair.

He said that it would be "manifestly unfair" if the deal was blocked and would contravene EU competition rules, given that the company has addressed every issue raised in the EU's Statement of Objections.

Ryanair said it has eliminated all "competitive overlaps" between itself and Aer Lingus. International Consolidated Airlines Group, otherwise known as IAG, has said that it would take over divestments of Ryanair's and Aer Lingus's entire London-Gatwick operations, and Flybe has committed to take over 43 Aer Lingus UK and European routes.

Kiely said: "Ryanair has no alternative but to appeal any prohibition decision and we expect to get a fair hearing at the European Courts, as we haven't received one from Commissioner Almunia and his case team. This decision is clearly a political one to meet the narrow, vested interests of the Irish government and is not based on competition law."

Shares in Ryanair were down 0.21% at €5.65, while Aer Lingus and Flybe took a greater hit, trading down 4.48% and 11.84%, respectively.

IAG was up 0.22% on the same day it announced that it is to cut 3,800 jobs at its Spanish subsidiary Iberia.

BC

Related share prices
Ryanair Holdings (RYA) share price
Aer Lingus Group (AERL) share price
Flybe Group (FLYB) share price
International Consolidated Airlines Group SA (CDI) (IAG) share price