Watchdog could foil Ryanair plan for Stansted stake

The Competition Commission will stamp down on Ryanair's bid to take a 24.9 per cent stake in any consortium that buys Stansted airport.

This would again put the Dublin-based group at odds with regulators, with the European Commission having just launched a probe into Ryanair's third bid in five years for rival Aer Lingus.

Michael O'Leary, the low-cost airline's boss who has spoken of charging passengers to use the toilet, wants to take a stake in Stansted after a consortium buys the airport from current operator BAA. The Heathrow-owner has been forced to sell Stansted by the Commission as part of a break-up of what was deemed a monopoly in the South-east.

Ryanair believes that by investing in the group that eventually purchases Stansted, its interests will be better served as the airline that is arguably the airport's anchor tenant.

Ryanair operates 41 planes out of the Essex site and wants the airport redesigned in its own no-frills image, including speedy turnaround times and less of what Mr O'Leary claims is wasted space, such as the train service from the terminal to departures. Manchester Airports Group is one potential bidder, as it is believed to be keen to extend its existing four-airport portfolio.

Mr O'Leary has insisted that he would only be looking for a one-quarter stake, admitting anything greater than that could run into regulatory difficulties. However, the Commission hinted strongly in its earlier investigation into BAA's market dominance that resident airlines could own no more than a tiny slice – perhaps 5 or 10 per cent, according to sources close to the watchdog – of any airport that was later sold.

The fear is that the airline would make decisions that would hurt competitors at the same airport, which in Stansted's case would include easyJet and Thomson Airways.

Stansted is expected to fetch more than £1bn, though valuations putting its assets at £1.3bn are thought to be on the high side.

Last week, Mr O'Leary said that he was interested in Ryanair helping to manage the airport, and that the next runway built in the South-east will be a second at Stansted.