Apollo’s agreed £5.7 billion takeover of easyJet could lead to a new focus on its tour operation, but only once it has been given the all-clear by EU authorities.
News of a potential acquisition of easyJet first hit the headlines earlier this year when US investment firm Castlelake made an initial bid for the airline at £5.60 in June, which was rejected.
Further bids throughout June were also rejected, and it was only when Castlelake tabled a fifth cash proposal of £6.90 a share in July, valuing the business at £5.5 billion, that the easyJet board indicated it was minded to recommend the offer.
However, just five days later rival investors Apollo swept in with an offer valuing each share at £7.15, giving a total value of £5.7 billion, and by 6 August, Castlelake had withdrawn from the process, allowing Apollo and the airline to announce an agreement.
The deal is expected to complete by the end of the first quarter of 2027.
In a statement released in August, Apollo outlined plans for the new acquisition, saying: “Apollo has followed easyJet for many years and continues to regard it as one of the most attractive businesses in the global aviation sector and a highly differentiated franchise with significant long-term growth potential.
“Apollo believes in easyJet’s existing strategy of evolving and strengthening the low-cost carrier model, most notably through upgauging the fleet, enhancing the ancillary and loyalty offering, and scaling [easyJet] Holidays into a structurally differentiated earnings stream.”
The airline, which in March 2026 was operating 356 aircraft across 1,273 routes serving 165 airports in 37 countries, continues to make a profit despite being impacted by the Iran war and ongoing energy issues, which are impacting every European airline.
EasyJet’s third quarter results ending 30 June 2026 shows a headline profit before tax of £85 million, down from £286 million in Q3 2025, having carried 25.8 million passengers giving it a load factor of 88.9 per cent.
Speaking at the announcement of the results, Kenton Jarvis, easyJet’s CEO, was remaining optimistic for the final quarter.
He says: “We have continued to manage the impact of the Middle East conflict, and its effect on fuel prices and booking trends, during the quarter.
“Pricing has been attractive, driving strong late booking demand for our flights and holidays and our relentless focus on execution has delivered an excellent operational performance and even greater levels of customer satisfaction.
“As consumer confidence increases, we are seeing the load factor gap close for peak summer and an extension of the booking curve as customers continue to prioritise travel and take advantage of our great fares.”
Key connections
Aviation analysts OAG partner John Grant argues that the airline’s success comes as a result of its strong network and its new owners understand this.
He says: “The deal is not going to make much difference to the network or the product. They’ve got pretty strong positions in the market as a low cost airline serving both business and leisure communities.
“They’ve got significant presence in most of the capital cities in Europe as well as its other prime airports.
“They’re not going to sacrifice any of that for other opportunities as the value of the business is as much in the slots at those airports as it is in the actual revenue they generate.
“I can’t see them following Wizz Air or Ryanair and going into very small, unserved markets like Tirana or Armenia and putting three of four aircraft in there. That’s not their business model.”
AGB Associates managing partner and former head of ABTA’s legal services Alan Bowen agrees that while the core of easyJet’s network is unlikely to see much initial change, the new owners will be looking at the bottom line from day one.
He says: “The one thing the buyer will be looking for is profitability therefore anything that is on the verge may well get dumped.
“That obviously is a concern for some of the smaller airports that are rather more dependent on easyJet than they would like.”
Room to grow
Sven Carlson Aviation Consulting managing director Carl Denton argues that any major restructuring of the airline’s network will depend on how Apollo decides to grow the airline’s subsidiary easyJet Holidays.
The tour operating arm, while being a small part of overall operations, recorded a headline profit before tax of £84 million in Q3 2026, a drop of just £2 million year on year and has long been the subject of expansion discussion.
Denton says: “EasyJet Holidays is where they have an incredible amount of scope to grow. They have got access to a very large number of seats of which the tour operator, their own company, takes a very small proportion.
“But they are getting double bubble on the profit, as they are benefitting on the profit on the seat and then the other associated parts of their holiday.
“They are pushing against an open door in terms of them being a tour operator and this is why OTAs are facing a bit of a problem as they don’t have their own seat content.”
However, Bowen argues that any expansion of the tour operation will not be at the expense of the airline’s operations.
He says: “EasyJet Holidays is clearly a very profitable business but it is a very small part of it and it isn’t driving the airline’s route development strategy like as it does with Jet2 or Tui.
“It is seen as something to expand but they have such an effective seat-only operation in easyJet that taking a lot of seats away from the airline isn’t a good idea but they clearly have the potential to grow the operator as part of their market share.”
Whatever the impact of the deal on easyJet’s operations, Bowen adds they still need to get it cleared by the EU and UK authorities whose rules require the airline to remain majority EU-owned and controlled in order to retain its operating rights within the bloc.
He says: “Some people think it’s a really good deal but it is going to be subject to a lot of investigation by the EU as well as UK competition authorities.”
Denton agrees, adding: “I know from the history of the acquisition of travel firms and airlines that the ownership issue is always very difficult.
“The EU will be looking at it with a very close eye to make sure it meets all the requirements in terms of majority ownership remaining in the EU.”