Ryanair says it will appeal the findings of a report by the British competition watchdog which has ordered the airline to reduce its stake in Aer Lingus from 29% to just 5%.

The commission said, in a report today, that Aer Lingus’s commercial policy and strategy was likely to be affected by Ryanair’s shareholding, and that it could lead to a reduction in competition.

"We were particularly concerned about Ryanair’s ability, either directly or indirectly, to impede Aer Lingus from combining with another airline to build scale and achieve synergies to remain competitive," the Competition Commission said.

But Ryanair said it will appeal the ruling and added that it offered unprecedented measures ease the commission’s concerns.

"While Ryanair is one of the UK’s largest airlines, Aer Lingus has a tiny presence in the UK, serving just six routes to the Republic of Ireland," Ryanair Chief Executive Michael O’Leary said in a statement.

Ryanair has made three unsuccessful attempts to buy Aer Lingus in the seven years since it first bought the stake.

Aer Lingus welcomed the ruling and said it must be implemented in full.

"It was unacceptable that our principal competitor was allowed to remain on our share register with a shareholding of 29.82% and interfere with our business despite the European Commission blocking both Ryanair's first hostile takeover attempt six years ago, and its most recent hostile takeover attempt earlier this year," it said.

Speaking to Bloomberg, Mr. O'Leary has said the low-cost carrier cannot find a buter for their Aer Lingus stake.