Ryanair Holdings lost its latest bid to buy Irish rival Aer Lingus Group after the European Commission ruled a deal would hurt competition.

It is the third time European Union regulators have blocked the €694m takeover.

The Commission had already informed the discount carrier of its intention to prohibit the offer earlier in the month.

The watchdog said the merger would have created a monopoly in Ireland, where Ryanair and Aer Lingus are currently direct competitors.

"The Commission's decision protects more than 11m Irish and European passengers who travel each year to and from Dublin, Cork, Knock and Shannon," EU Competition Commissioner Joaquín Almunia said in a statement.

"For them, the acquisition of Aer Lingus by Ryanair would have most likely led to higher fares."

In 2007 the Commission threw out a merger bid, saying it would stifle competition on Irish flights.

Ryanair slammed the decision as "political" and vowed to appeal. The carrier said it offered a "historic and unprecedented" remedies package and accused the Irish government's interests in Aer Lingus of thwarting a deal.

The Irish government holds a 25% stake in that low-cost carrier.

Ryanair, which currently holds 29.8% in Aer Lingus, said the latest offer had resolved all the Commission's competition concerns.

"Ryanair delivered a structural divestment remedy including, not one, but two upfront buyers, irrevocable and binding commitments from those two upfront buyers, divestiture of Aer Lingus' flights in each of the 46 crossover routes, together with offers of slot divestiture for an unlimited period of time on all other potential competition routes," it said.

In Ryanair's latest bid, regional carrier Flybe Group would take over 43 Aer Lingus routes.

The airline tried to convince the Commission that Flybe was a credible rival to Ryanair, despite having issued several profit warnings over the past two years.

Ryanair also proposed transferring all of Aer Lingus's routes between London Gatwick and Ireland to British Airways.

However, the Commission said the new offer failed to rid issues including that it would create an outright monopoly on 28 routes, while reducing competition on a further 11 routes.

RD

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