There will likely be a good few throughout the travel industry fizzing with excitement, and it’s nothing to do with England's World Cup triumph over Mexico on Monday morning (6 July).
Anyone who bought easyJet shares just two months ago when they were in the doldrums at around £3.50 is likely to see their brief investment doubled if US investment firm Castlelake succeeds in its bid for the budget airline group.
EasyJet has agreed a deal in principle after weeks of protracted – sometimes tetchy – negotiations, and shareholders, who will be offered £6.90 a share, won’t say no – but it’s far from a done deal.
The major obstacle is that Castlelake which, among its specialisms, leases aircraft – including some of easyJet’s – is US-based. Under EU rules, which still apply despite Brexit, ownership of a UK airline must be at least 51% EU-based.
- 28 February – US and Israel attack Iran, shutting Middle East airspace; turmoil sends airline stocks tumbling
- 19 May – easyJet share prices fall to a one-year low of £3.40, down from around £5.80 a year earlier
- 29 May – Castlelake forally discloses its interest in easyJet
- 12-23 June – Castlelake makes four bids for easyJet, starting at £5.60 a share rising to £6.25 and eventually to £6.50 – all four are rejected
- 25 June – easyJet agrees to share "limited commercial information" with Castlelake to encourage a stronger bid with a 5 July deadline
- 5 July – Castlelake returns with an offer worth £6.90 a share, valuing easyJet at around £5.2 billion; easyJet and Castlelake announce "agreement in principle", with Castlelake given until 5pm on 3 August to disclose a firm intention to make an offer or pull out
Castlelake has reportedly lined up former easyJet and Ryanair Chief Operating Officer Peter Bellow, plus experienced aviation executive Mark Breen, to front an investment arm. Both men are Irish, but will need to convince regulators with their plan.
More importantly, the money will need to come from EU-based investors.
Cruise brand MSC was rumoured to have been interested, but sources have told The Times there had been no contact with Castlelake. Any involvement of one of the big European groups, like Air France-KLM or Lufthansa, would doubtless lead to regulators intervening.
There are significant challenges and Castlelake, which currently owns 2% of easyJet, will also need to talk to easyJet founder Stelios Haji-Ioannau, who retains a 15% stake, to smooth the deal. No easy feat.
Ancillary appeal?
EasyJet has a lot of value locked into its brand, particularly with its valuable slot portfolio at key airports like Gatwick, Paris Charles de Gaulle, Milan Malpensa and Schiphol. Together with a long list of orders with Airbus, which has a big backlog of demand after Covid, it makes for an attractive buy at a bargain price.
It is pure speculation to suggest easyJet will be more cost-conscious if a former Ryanair chief gets behind it, but someone who has worked at both carriers will doubtless know where savings can be made.
Nevertheless, easyJet, deservedly, has its fans among consumers and trade, and any new owners will not want to alienate them.
One new venture for Castlelake will be the easyJet holidays package brand, which is currently being launched to 500 agents in Berlin and is live in several other European countries. Budget airlines are obsessed with ancillary sales, and you could argue package holidays are the biggest ancillary sale there is.
In the 12 months to the end of September 2025, easyJet airline profits increased by £50 million, but the package arm’s rose by £56 million and the tour operator is “on target” to deliver profits of £450 million by 2030.
EasyJet holidays will not be seen as a spurious subsidiary to its new owners; it is now inextricably linked to the brand. Agents can surely rest assured that whatever happens to easyJet Group, they will continue to have access to its holiday off-shoot – and that’s another victory to celebrate.
