The European Commission (EC) is investigating the proposed takeover of by Irish rival , and from comments made today by the commission it appears there is a concern the deal could be anti-competitive.
“On a large number of routes, mainly out of Ireland, the two airlines are each other’s closest competitors and barriers to entry appear to be high,” the EC wrote in a statement on Wednesday.
“Many of these routes are currently only served by these two airlines. The takeover could therefore lead to the elimination of actual and potential competition on a large number of these routes,” the EC adds.
The EC also says that the number of routes that could be affected by the merger is higher than in 2007, when it rejected a previous takeover attempt of Aer Lingus by Ryanair.
Aer Lingus management and the Irish government, which holds 25% of the airline’s stock, are fervently opposed to a merger, and Aer Lingus is advising its shareholders to dismiss Ryanair’s offer.
, meanwhile, has indicated that it would like to increase its recently acquired 3% holding in Aer Lingus. Also, the Irish government has to sell its shareholding in the airline as part of the European Union’s economic rescue package for Ireland.
The EC ruling is due Jan. 13, 2013. The commission could block the transaction, demand concessions or approve Ryanair’s offer.
Ryanair currently owns a 29.8% stake in Aer Lingus from previous takeover bids. That holding is subject to a separate U.K. Competition Commission investigation.