EU antitrust regulators stepped up their investigation into Ryanair's 700-million-euro ($879.65 million) takeover bid for Aer Lingus, flagging concerns that the proposal may eliminate competition on a number of routes in Europe.
Irish budget carrier Ryanair is making its third attempt to acquire former Irish flag carrier Aer Lingus. The European Commission blocked Ryanair's 2007 takeover bid, citing worries about the combined carrier's dominance of 35 routes.
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The EU executive said on Wednesday that a preliminary investigation conducted since it was notified of the takeover bid in late July suggested potential competition concerns.
"On a large number of European routes, mainly out of Ireland, the two airlines are each other's closest competitors and barriers to entry appear to be high. Many of these routes are currently only served by the two airlines," the Commission said in a statement.
"The takeover could therefore lead to the elimination of actual and potential competition on a large number of these routes," it said.
The European Union's executive said it would decide by Jan. 14 whether to clear or block the deal.
Ryanair Chief Executive Michael O'Leary said last week the carrier would offer unspecified concessions to ease regulatory concerns.
A source familiar with the matter has told Reuters that the company was talking to British Airways and Virgin Atlantic about possibly opening routes and divesting airport slots.