The European Union is reviewing its airline ownership rules to prevent foreign investors from gaining significant control over airlines. This review aims to maintain control of regional carriers within the EU and is prompted by a bidding war between U. S. firms for the budget airline easyJet. The EU rules require 51% local ownership, which may challenge U. S. investment attempts.
EasyJet recently supported a £5.7 billion offer from Apollo Global Management, which exceeds a previous bid from Castlelake, but has not clarified how it will meet EU ownership requirements for non-EU acquisitions. This deal could set a precedent for private equity buyouts in the regulated airline industry.
The EU review is expected to take place in the autumn, focusing on the types of corporate structures allowed concerning control and ownership. The involved parties, including easyJet and Apollo, have not yet discussed their deals with European regulators. The EU official expressed concern that there may be a misconception about the enforcement of existing rules in the industry.
With information from Reuters
