Apollo's agreement to buy EasyJet was struck in August after competing bidder Castlelake dropped out. Kenton Jarvis, the airline's chief executive, said the transaction is progressing with an eye to closing early next year. He spoke Thursday at a meeting of the Airlines for Europe lobby group in Brussels.
On investor sentiment, Jarvis said, "I don't see a real barrier from shareholder sentiment, that's what I'm hearing." He also noted, "And from regulators, we'll just have to wait and see." The scheme document tied to the deal is scheduled for release next Thursday.
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Apollo will take control of a pioneer in Europe's ultra low-cost market with several valuable assets: a fleet of modern Airbus SE A320-family jets, coveted takeoff and landing slots at busy airports in London, Milan and Geneva, and a vacation packages arm that's performing well.
Jarvis said rising fuel prices are leading the airline to reduce winter capacity, cutting as many as 700,000 seats. If fuel becomes even more expensive, he expects fares to increase.
The family of founder Stelios Haji-Ioannou holds the biggest stake in EasyJet, at 15.3%. Jarvis said the founder supports the transaction and is slated to take part in board deliberations after it closes. As Apollo is based in the US, it cannot assume outright control due to UK and European regulations mandating that airlines be majority owned and controlled by nationals of those areas.
The structure of this transaction is designed to satisfy that requirement. The EasyJet brand will continue post-acquisition, and Jarvis pointed out that he was speaking to the media for the first time since the agreement was reached.
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