Suzannah Streeter, chief investment strategist at the Wealth Club, said Apollo is focusing on easyJet’s potential.
“Although the carrier has recently been hit by high fuel costs and geopolitical unrest, it has built a resilient European network, a strong balance sheet and, importantly, a fast-growing leisure business. This is likely to be one of Apollo’s biggest attractions.”
“Package vacations generate higher margins and more predictable revenues than stand-alone airline tickets,” he said.
“For travellers, it is business as usual right now, with flights, bookings and loyalty schemes unaffected while any deals work their way through the regulatory process.”
Conroy Gaynor, senior consumer analyst at Bloomberg Intelligence, said that while Apollo has “more explicitly” supported easyJet’s growth model, “the need to improve airline margins shows that any success in reducing costs will not necessarily translate into lower fares”.
EasyJet’s latest statement does not mean the deal has been confirmed. Apollo has been given a deadline of 17:00 on 7 August to either submit a firm bid for easyJet or walk away. Castlelake’s deadline to submit a firm offer is Aug. 3.
Apollo’s move came after Castlelake made multiple offers for easyJet, which were initially rejected by the carrier as it accused the US company of trying to buy it “on the cheap”.
However, on Sunday easyJet said it had reached an agreement in principle with Castlelake on a potential takeover offer worth around £5.2bn.
