The European Commission has begun a detailed investigation into a proposed Ryanair takeover of Aer Lingus.
In a statement the Commission said its preliminary investigation into the proposed takeover indicates potential competition concerns.
Both airlines are the main operators out of Dublin Airport and on a large number of European routes.
It says many of these routes are currently only served by the two airlines and that the takeover could therefore lead to the elimination of actual and potential competition on a large number of these routes.
The two carriers are each others closest competitors and it says barriers to entry appear to be high.
Aer Lingus has already recommended its shareholders reject the Ryanair offer.
The Commission will now investigate the proposed merger in-depth to determine whether these initial concerns are confirmed or not.
It adds that this inquiry does not prejudge the result of the investigation.
The Commission now has 90 working days until 14th January 2013 to take a decision on whether the proposed transaction would significantly impede effective competition.
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