Travel expert Simon Calder has issued a message to anyone with flights booked with easyJet following news that the budget British airline has agreed to be bought by US investment giant Apollo Global for £5.7 billion. The deal, announced last week, has raised concerns among passengers about the future of their bookings and the airline's operations.
What the Takeover Means for Passengers
Calder, speaking on his podcast Travel Expert with Simon Calder, explained that easyJet had reached an "agreement in principle" with Apollo Global. This comes after a series of approaches by another American firm, Castlelake, which could still make a counter offer. The deal would see easyJet, once the largest budget airline in Europe but now second to Ryanair, change hands.
Calder noted that Ryanair is now almost twice the size of easyJet, but its market capitalisation is five to six times greater. He said the best-case scenario for passengers if the deal goes through is that little changes: "That easyJet continues on its trajectory which is one of steady growth and of course, offering great service, incredible safety standards and delivering very good value for the traveller."
Advice for Summer Holidaymakers
Many passengers are worried about flights and holidays already booked, especially with the peak summer season approaching. Calder's co-host Greg Dickinson urged calm: "Let us stress that if you have a holiday booked with easyJet this summer or a flight with easyJet, it is going ahead as normal. These changes are going to take months to get the deal completed, and it will be a year until we start seeing anything different."
Calder agreed, saying: "I think that is absolutely right, do not fret. I've had some people say to me, 'Is it alright to book with easyJet?' Well, of course it is." He added that if flights booked for next year are cancelled due to the takeover, passengers are entitled to ask the airline to find an alternative at no extra cost.
Details of the Deal
A stock market statement from Apollo said: "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." It added that Apollo places a high value on people and believes retaining key staff will be "of paramount importance," noting that other airline investments have led to growing employee bases.
EasyJet was founded by entrepreneur Sir Stelios Haji-Ioannou in 1995 to offer low-cost fares in Europe. The first flights took off in November 1995 from Luton to Glasgow and Edinburgh. Sir Stelios and his family still own 15.3% of the airline.
Expert Analysis
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: "EasyJet shareholders are strapping in for an exciting ride as Apollo enters the race to land the orange airline company. Apollo's offer is now the preferred option and the one that easyJet's management would recommend to shareholders. But the deal's not off the runway yet, with Apollo having until August 7 to decide whether to make a formal bid. In that time, rival bidder Castlelake could still come to the table with improved terms."
