economy
Private equity is circling budget airlines after Apollo's EasyJet deal
Private equity investors could target more undervalued airlines following Apollo's swoop for EasyJet.
TL;DR
- Apollo Global Management's bid for EasyJet suggests further private equity interest in European airlines.
- Jet2 is identified as a potential takeover target due to its status as a low-cost carrier with similar dynamics to EasyJet.
- The U.K. market is considered a "fertile hunting ground" for private equity due to relatively lower valuations compared to global peers.
- While budget airlines are seen as attractive, takeovers of international flag carriers are considered more complex.
- EasyJet is expected to be taken private in a deal valued at approximately $7.7 billion, following Castlelake's withdrawal of its bid.
- The airline sector faces challenges including low margins, cyclical demand, and high regulation, but private ownership might lead to different financing strategies and potentially better consumer prices.