Air France KLM Chief Executive Officer Ben Smith signaled he’s willing to consider a possible involvement in a bid for EasyJet Plc, saying he’d take a call from suitor Castlelake LP should the investment firm come with a proposition.
Calling EasyJet’s slot portfolio “very impressive,” Smith nevertheless said his company is not involved in a bid for the time being. At the same time, the airline group has experience with Castlelake, having cooperated with the company on a joint takeover for Scandinavian carrier SAS in recent years.
The UK low-cost carrier’s airport slots across Europe are attractive, and it’s “no surprise” that a party or group would be looking to buy EasyJet, Smith said.
Asked whether Air France-KLM would pick up the phone to talk about a proposition for EasyJet, Smith said “for sure, and I would expect all of our competitors to do the same.”
IAG SA, owner of British Airways, also isn’t considering getting involved in an EasyJet bid for the time being, CEO Luis Gallego said in a separate TV interview, adding that “you never know.”
Castlelake would need a European partner to make a bid work, given that regulation prevents a US company from owning a majority in a European airline. The investment firm said last week that it’s considered an approach, and it has until the end of the month to specify its intentions or walk away.
EasyJet said any deal is rife with risk, calling the bid “highly opportunistic” given the airline’s depressed stock price.
Castlelake is weighing a partnership with shipping and logistics firm MSC Mediterranean for an EasyJet bid, Corriere della Sera reported on Thursday, citing two people familiar with the matter.
Air France-KLM is seeing strong demand across its network, especially into European hubs such as Paris and Amsterdam, Smith said in an interview in Rio de Janeiro for the annual general meeting of the International Air Transport Association.
Any spike in fuel price will require Air France-KLM to increase fares to offset the higher costs, he said. In turn, that hike in ticket prices risks weighing on demand, he added.
“It is a little unfortunate that a lot of customers are still not confident that there will be enough fuel,” he said. “So we are seeing a late booking environment.”
Source: www.bloomberg.com
Aleksei Andrievskii | Advisory Board Member, Bendura Bank AG | Liechtenstein