Europe’s second-largest low-cost airline, EasyJet, could be taken private after the Minneapolis-based ‘alternative investment firm’ Castlelake signalled a surprise interest in the carrier on Friday.
Castlelake’s involvement in the aviation industry is perhaps best known for the firm’s 32% stake that it took in SAS Scandinavian Airlines as part of a joint acquisition with the Air France-KLM Group.
Last year, Castlelake agreed to sell its stake in SAS to Air France-KLM, although it still runs a specialist aviation lending business which provides “debt capital to airlines and leasing companies for new and used aviation assets.”
The lending business was used to provide Virgin Atlantic with a $400 million loan secured against the carrier’s assets, including an Airbus A350-1000 and nine Rolls-Royce Trent jet engines.
More recently, Castlelake was reportedly in early-stage talks with Spirit Airlines about a possible asset sale. The talks did not, however, amount to anything.
On Friday, Castlelake confirmed that it was considering an offer for Luton-based EasyJet, which was one of the very first low-cost airlines in Europe. Castlelake has not, however, yet approached EasyJet’s board of directors with a formal offer.
EasyJet reported a loss of £552 million in the six months up to April 2026, and although the airline expects to finish the year broadly flat, continued uncertainty in the Middle East and soaring jet fuel prices could pile the pressure on the airline.
The airline has hedged around 70% of its fuel requirements for the summer, meaning it will pay a set pre-war price for this fuel, but fuel costs in March alone added £25 million to its costs.
Dealmaking websites have been awash with rumors that EasyJet could be the subject of an acquisition, although it wasn’t until late Friday that Castlelake confirmed that it was interested in the airline.
Whether a bidding war could emerge with a major airline group is unclear. Ryanair’s chief executive, Michael O’Leary, has already gone on the record to state that his airline is not interested in buying up any rivals this year.
Meanwhile, the Air France-KLM Group and the Lufthansa Group are currently bidding against one another to acquire TAP Air Portugal as the government looks to privatize the loss-making carrier.
The other potential contender is the IAG Group, which owns British Airways, Iberia, and the low-cost Spanish carrier Vueling. The risk of regulators blocking this deal, given how much power it would give British Airways in the UK market, can’t be underestimated.
