EasyJet is facing a potential takeover from US private equity giant Castlelake as the low-cost airline grapples with the fallout from the Iran war.
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.
The potential offer follows a recent share price slump at the budget airline, which has been struck by rising jet fuel prices and travel uncertainty from the Iran war.
The company said last week that bookings for summer were down on last year as households held off on buying flights.
EasyJet said it was raising air fares to counter the impact of surging fuel prices in the wake of the closure of the Strait of Hormuz, which has disrupted 20pc of the world’s oil flow.
While easyJet has fixed the price of more than 70pc of its fuel needs until September, its kerosene bill still rose by £25m in March. This makes it one of the least-hedged London-listed airlines.
Kenton Jarvis, the carrier’s chief executive, said the airline was bracing for a hit from fuel that could reach £175m this summer. He said the increase in minimum fares was designed to pass on some of the pain if oil prices remain high for the rest of the year.
Uncertainty from the situation in the Middle East has caused a slump in easyJet’s share price. Shares in the business have fallen 22.9pc since the beginning of the year, making it a more attractive takeover target for suitors looking for a bargain.
EasyJet’s share price is down by 53pc over the past five years, leaving it valued at £3bn and making it the smallest of Europe’s big five airlines.
Under UK takeover rules, Castlelake has until June 26 to make a bid or walk away.
Any deal for easyJet would probably have to win over Sir Stelios Haji-Ioannou, the airline’s founder, who remains the largest shareholder in the company along with his family.
Sir Stelios launched easyJet in 1995, growing it into one of Europe’s largest low-cost airlines. He stepped down from the board in 2010 following a clash over the future direction of the company. However, his family still retains a 15pc stake.
Castlelake’s interest in easyJet comes after a series of earlier potential deals for the airline.
Less than a year ago, speculation emerged over a bid from the world’s biggest shipping container company.
Mediterranean Shipping Company was reported to have tapped an unnamed investment fund to explore a potential offer in October 2025. However, the shipping firm later denied any involvement.
Meanwhile, easyJet rejected an unsolicited bid in 2021 after carriers worldwide were laid low by Covid, saying it undervalued the company. The suitor was never identified but was reported to be low-cost rival Wizz Air.
Castlelake, an American private equity firm, was founded in 2005 by Rory O’Neill. Earlier this year, the firm was named one of several potential buyers for Spirit Airlines.
Private equity and financial bidders have often avoided making bids for airlines because of their extreme sensitivity to fluctuations in the price of oil and hence jet fuel, which can wipe out profits at a stroke.
EasyJet declined to comment.