EasyJet takeover
Discussion
Looks like they’ve accepted an offer from Castlelake https://www.bbc.co.uk/news/articles/cgjxx7ngz51o
What’s the thoughts? Beginning of the end or a new opportunity? What percentage of the fleet is owned versus leased? Owned fleet sold & leased back?
What’s the thoughts? Beginning of the end or a new opportunity? What percentage of the fleet is owned versus leased? Owned fleet sold & leased back?
Beginning of the end, sadly. I don’t see how it’s possible for an airline, of all businesses, to succeed under PE ownership. If they run retailers & supermarkets into the ground (eg Debenhams, Asda, Morrisons) I don’t see how they can allow the level of vastly expensive training, maintenance, fleet renewal, marketing, IT investment etc which airlines need to remain competitive in what is the most cut-throat of all industries. Particularly for low-cost carriers which don’t have fortress hubs & all-powerful loyalty programs for frequent flyers, premium & corporate passengers.
It’s inevitable that the new owners will asset-strip the business by selling & leasing back the fleet thereby permanently increasing the cost base & destroying competitiveness. Staff salaries & working conditions will be squeezed which inevitably means that pilots & engineers will leave & management will struggle to replace them.
It’s inevitable that the new owners will asset-strip the business by selling & leasing back the fleet thereby permanently increasing the cost base & destroying competitiveness. Staff salaries & working conditions will be squeezed which inevitably means that pilots & engineers will leave & management will struggle to replace them.
Bradgate said:
Beginning of the end, sadly. I don t see how it s possible for an airline, of all businesses, to succeed under PE ownership. If they run retailers & supermarkets into the ground (eg Debenhams, Asda, Morrisons) I don t see how they can allow the level of vastly expensive training, maintenance, fleet renewal, marketing, IT investment etc which airlines need to remain competitive in what is the most cut-throat of all industries. Particularly for low-cost carriers which don t have fortress hubs & all-powerful loyalty programs for frequent flyers, premium & corporate passengers.
It s inevitable that the new owners will asset-strip the business by selling & leasing back the fleet thereby permanently increasing the cost base & destroying competitiveness. Staff salaries & working conditions will be squeezed which inevitably means that pilots & engineers will leave & management will struggle to replace them.
Isn't that the whole point of PE? Run something into the ground, extract all the money you can and then sell the corpse (bit by bit if you have to). It s inevitable that the new owners will asset-strip the business by selling & leasing back the fleet thereby permanently increasing the cost base & destroying competitiveness. Staff salaries & working conditions will be squeezed which inevitably means that pilots & engineers will leave & management will struggle to replace them.
I don’t know if running it into the ground is the point of PE as it tends to result in the value of the shareholding being wiped out, more the near-inevitable consequence of the business practices employed beforehand, ie liquidating almost every penny in assets possible, extracting the proceeds and saddling the organisation with the debt used to purchase it.
In the case of easyJet, from what I’ve seen, there’s apparently around 200 aircraft owned outright (IIRC they were forced into a sale & leaseback during the pandemic to survive, so less owned aircraft than might be expected), orders for hundreds of A320/321 Neos that are like gold dust and obviously slots at various large European airports including Gatwick, Amsterdam, Charles de Gaulle etc.
Probably plenty of value in the company that can be bled dry. In some ways it might have been better if Wizz had succeeded in their attempts a few years ago, much as I think they’ll eventually over-expand and go bust. I never thought I’d say this, but I’m glad now that I’ve got an ATOL for my October 27 holiday with easyJet, anyone know what happens if they decide to abandon the route you’re booked to travel on, but are still trading?
In the case of easyJet, from what I’ve seen, there’s apparently around 200 aircraft owned outright (IIRC they were forced into a sale & leaseback during the pandemic to survive, so less owned aircraft than might be expected), orders for hundreds of A320/321 Neos that are like gold dust and obviously slots at various large European airports including Gatwick, Amsterdam, Charles de Gaulle etc.
Probably plenty of value in the company that can be bled dry. In some ways it might have been better if Wizz had succeeded in their attempts a few years ago, much as I think they’ll eventually over-expand and go bust. I never thought I’d say this, but I’m glad now that I’ve got an ATOL for my October 27 holiday with easyJet, anyone know what happens if they decide to abandon the route you’re booked to travel on, but are still trading?
alangla said:
I never thought I d say this, but I m glad now that I ve got an ATOL for my October 27 holiday with easyJet, anyone know what happens if they decide to abandon the route you re booked to travel on, but are still trading?
Generally, when airlines drop a particular route they will offer passengers the choice of re-route, from a different airport or with another carrier if necessary, or a full refund. captain_cynic said:
Bradgate said:
Beginning of the end, sadly. I don t see how it s possible for an airline, of all businesses, to succeed under PE ownership. If they run retailers & supermarkets into the ground (eg Debenhams, Asda, Morrisons) I don t see how they can allow the level of vastly expensive training, maintenance, fleet renewal, marketing, IT investment etc which airlines need to remain competitive in what is the most cut-throat of all industries. Particularly for low-cost carriers which don t have fortress hubs & all-powerful loyalty programs for frequent flyers, premium & corporate passengers.
It s inevitable that the new owners will asset-strip the business by selling & leasing back the fleet thereby permanently increasing the cost base & destroying competitiveness. Staff salaries & working conditions will be squeezed which inevitably means that pilots & engineers will leave & management will struggle to replace them.
Isn't that the whole point of PE? Run something into the ground, extract all the money you can and then sell the corpse (bit by bit if you have to). It s inevitable that the new owners will asset-strip the business by selling & leasing back the fleet thereby permanently increasing the cost base & destroying competitiveness. Staff salaries & working conditions will be squeezed which inevitably means that pilots & engineers will leave & management will struggle to replace them.
It didn t get to a vote but the board signalled they were supportive of a deal that represented value for shareholders. Aside from the day to day running of the business securing value for shareholders is their job.
As a (reasonably well invested) shareholder myself i did not agree with the board on this point. They were giving in too “easy” at 690p…. Clearly others thought so too!
As a (reasonably well invested) shareholder myself i did not agree with the board on this point. They were giving in too “easy” at 690p…. Clearly others thought so too!
Edited by DoubleSix on Friday 10th July 21:46
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