British budget carrier agrees to a $6.7 billion private equity buyout

European aviation could be headed for one of its biggest ownership changes in years after budget airline EasyJet reached an agreement in principle to be acquired by U.S. private equity firm Castlelake in a transaction valued at approximately £5 billion ($6.7 billion). The proposed takeover reflects growing consolidation in the airline industry as carriers navigate rising operating costs and an increasingly competitive market.

The announcement follows months of negotiations during which EasyJet’s board rejected four earlier proposals before eventually agreeing to continue discussions with the U.S.-based investment firm. Investors welcomed the breakthrough, sending EasyJet shares nearly 10% higher during trading on the London Stock Exchange.

Under the proposed agreement, Castlelake has offered £6.90 per share, and EasyJet’s board has indicated that it is prepared to recommend the offer to shareholders if a formal bid is submitted. British takeover regulations require Castlelake to finalize its proposal by August 3 or withdraw from the process.

Founded in 1995 by entrepreneur Stelios Haji-Ioannou, EasyJet revolutionized European air travel by making affordable, no-frills flights available to millions of passengers. Operating from its primary hub at London Gatwick Airport, the airline has grown into one of Europe’s largest low-cost carriers, serving hundreds of routes across the continent.

Despite a strong recovery in passenger demand, EasyJet has struggled with rising fuel prices, inflationary pressures, and higher operating expenses, all of which have weighed on profitability. The recent spike in global energy costs following geopolitical tensions has further increased financial pressure across the aviation industry.

Castlelake, headquartered in Minneapolis, manages approximately $37 billion in assets and has extensive experience in aviation finance through its aircraft leasing business, which includes a fleet of around 375 aircraft serving airlines worldwide. Industry analysts believe this expertise could strengthen EasyJet’s long-term expansion strategy.

EasyJet said Castlelake has expressed confidence in the airline’s workforce and fully supports its fleet modernization program, viewing newer aircraft as essential to improving fuel efficiency, lowering emissions, and enhancing long-term competitiveness. The investment firm also plans to help strengthen the airline’s financial resilience while preserving its position as one of Europe’s leading low-cost carriers.

If completed, the acquisition would rank among the largest airline buyouts in recent years and highlight increasing private equity interest in the aviation sector as investors seek opportunities created by the industry's post-pandemic transformation and long-term growth potential.