Susannah Streeter, chief investment strategist at Wealth Club, said Apollo was focusing on EasyJet’s potential.
“While the carrier has been buffeted recently by higher fuel costs and geopolitical turbulence, it has built a resilient European network, a strong balance sheet and, crucially, a fast-growing holidays business. That’s likely to be one of Apollo’s biggest attractions.”
“Package holidays generate higher margins and more predictable revenues than airline tickets alone,” she added.
“For passengers, it’s very much business as usual for now, with flights, bookings and loyalty schemes unaffected while any deal works its way through the regulatory process.”
Conroy Gaynor, senior consumer analyst at Bloomberg Intelligence, said while Apollo has “more explicitly” backed EasyJet’s growth model, “the need to improve the airline margin suggests any success in lowering costs won’t necessary translate to lower fares”.
The latest statement from EasyJet does not mean a deal has been confirmed. Apollo has been set a deadline of 17:00 on 7 August to either make a firm bid for EasyJet or walk away. Castlelake’s deadline to make a firm offer is 3 August.
Apollo’s move came after Castlelake had made a series of offers for EasyJet, which had initially been rebuffed by the carrier after it accused the US firm of trying to buy it “on the cheap”.
However, on Sunday, EasyJet said it had reached an agreement in principle with Castlelake, over a potential takeover offer worth around £5.2bn.
Source:
www.bbc.co.uk
