EasyJet is facing a potential takeover from US private equity giant Castlelake amid the ongoing fallout from the Iran war. However, passengers need not worry about their flights just yet.
Takeover Proposal
In a statement released on Friday evening, Castlelake confirmed that it is in the “early stages of considering a possible offer” for the FTSE 250 airline. It added that “no approach has been made to the board of easyJet” and there was no certainty that it would make a bid for the company. Under UK takeover rules, Castlelake has until June 26 to make a bid or walk away.
CEO's Assurance
Kenton Jarvis, the carrier’s chief executive, said the airline was bracing for a hit from fuel that could reach £175m this summer. He told the BBC Today programme: “We've seen absolutely no issues with fuel supply at any of our airports in the UK, across Europe, or indeed beyond. We stay in very close contact with our fuel suppliers, airports, governments, and they are equally raising no issues looking forward.”
“What is true is obviously there's a lot less oil coming from the Gulf region, but fuel suppliers have successfully diversified with production increased in Norway, in West Africa, in the Americas. Refining capacity for jet fuel has also increased substantially outside of the Gulf region,” Jarvis added.
Summer Schedule
In March, the airline - which flies from Birmingham - reduced the number of available seats by 0.3 per cent due to the high fuel price. But Mr Jarvis said: “At easyJet, we fully intend to fly the summer schedule that we have on sale.” The airline’s CEO told Today presenter Nick Robinson: “Airlines typically make losses in the six months to March as they run through the winter and then look to make the profits as we operate in the summer. We actually saw our airline capacity increase by four per cent, and six per cent more passengers came with us because the planes were fuller. So demand was there, but the pricing was not increased versus last year.”
The carrier has raised its minimum fare and is conducting an “active review of all discretionary cost”. Looking ahead, the easyJet CEO said: “Demand seems to be very strong in what we call the late market. As we ran through April, demand was very strong for the month of April. We're seeing it again in May. But as you look further out, people are more cautious. People are waiting and watching, but they are booking as you approach, and I expect that strong late booking market to run through the summer.” He later told analysts that fares for the summer are “slightly above where they were last year over peak season.”
