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Varadkar: Ryanair-Flybe deal not enough

Tuesday, February 12 11:24:51

An agreement between Ryanair and the UK's Flybe designed to allay the fears of European authorities concerned about competition should Ryanair successfully take over Aer Lingus doesn't go far enough, according to Transport minister Leo Varadkar today.

He said the Ryanair-Flybe proposal does not do enough to satisfy the Government that air passengers will be protected in terms of competition and connectivity.

On the revised Ryanair bid for Aer Lingus, Leo Varadkar said what is being put together with Flybe is only for three years.

He said the fact that Ryanair has to give Flybe ''a gift'' of E100m to make it a competitor raises questions.

The Minister said the Government does not support the Ryanair bid for Aer Lingus because it thinks it would affect connectivity negatively.

This is because IAG will be given the Heathrow slots.

Regarding the Government's stake in Aer Lingus, he said the Government has decided that it will dispose of the Aer Lingus stake at the right time, the right price and in the right conditions.

Jim French, chief executive of British airline, Flybe, is in Dublin to sell the deal announced last week with Ryanair to create a new carrier as part of a deal with Ryanair to satisfy regulatory concerns over Ryanair's last-ditch bid for Aer Lingus.

He has pledged to develop more flights between Ireland and the UK if the European Commission gives the go-ahead.

Under the deal with Ryanair, the new carrier, Flybe Ireland, would receive E100 million and nine aircraft from Ryanair and commit to operating 43 routes for at least three years if Ryanair's Aer Lingus bid succeeds, he said.

Ryanair, Europe's leading low-cost carrier, is making its third attempt to take over rival Aer Lingus and has been told by the European Commission it has one last chance to submit measures to prove the merger will not curb competition.

Ryanair will also provide Flybe Ireland with forward sales cash and liabilities worth around E50 million.

In return Flybe will pay Ryanair E1 million for the newly created airline.

In addition to the Flybe deal, Ryanair will pass Aer Lingus's routes from London's Gatwick Airport to British Airways.