EasyJet has finally agreed in principle to a takeover by US investment firm Castlelake, after rejecting four previous offers. The airline’s board apparently decided that being owned by someone else might be the only way to avoid responsibility for their on-time performance record.
Here is what actually happened: EasyJet’s leadership, facing mounting pressure from passengers who have learned to book flights the way you book a lottery ticket—with zero expectation of actually winning—decided that a change of ownership might distract everyone from the fact that their planes arrive on time about as often as a solar eclipse. By agreeing to be acquired, they have successfully pivoted the conversation from “your flight was delayed four hours because we oversold it and then lost your luggage” to “exciting strategic developments in the aviation sector.”
Castlelake, a private equity firm with the kind of patient capital that suggests they have never actually flown EasyJet, apparently believes they can unlock value in an airline that has mastered the art of promising 6 a.m. departures and delivering 2 p.m. arrivals. Investors should note that “agreement in principle” is corporate speak for “we have shaken hands and agreed to keep talking,” which in EasyJet’s case means the takeover will probably be delayed by six months and then rerouted through a regional airport in the middle of nowhere.
The beauty of this move is that EasyJet gets to announce something optimistic while their actual planes continue their tradition of treating the published schedule as a suggestion rather than a commitment. Castlelake gets to dream about operational improvements. And passengers get to keep showing up at gates at 6 a.m. wondering if today is the day their flight will leave on time.
Spoiler: it is not.