The European low-cost airline sector is back in the spotlight for private equity investors. Following Apollo Global Management’s interest in EasyJet, investors are now looking at other potential targets across the sector, with U.K.-based carrier Jet2 emerging as a possible candidate.
According to Anna Macdonald, investment strategy director at Hargreaves Lansdown, airlines were hit hard during the early stages of the Iran war, but recent stock market performance suggests investors are anticipating further consolidation deals in the industry.
“Jet2 has similar dynamics to EasyJet,” Macdonald said, pointing to the strong recovery of the British low-cost carrier’s shares. The stock has climbed about 60% from its lows, while it gained 0.5% in Friday’s trading session.
Analysts say relatively low valuations of London-listed companies are making the U.K. market an increasingly attractive hunting ground for private equity firms. Investors could take advantage of depressed valuations to identify companies with growth potential and opportunities for strategic acquisitions.
The low-cost airline segment appears more appealing than traditional flag carriers, where the potential returns from a takeover are considered more challenging. Jet2 said it does not comment on market rumors or speculation. For now, there is no confirmation of any potential deal, but Europe’s airline sector remains firmly on investors’ radar.