Potential Industry Implications of the Bid for EZJ

Research evidence excerpt

Potential Industry Implications of the Bid for EZJ

Update

July 7, 2026 04:00 AM GMT

Morgan Stanley & Co. International plc+MAirlines | Europe Axel Stasse

Equity Analyst

Potential Industry Implications Axel.Stasse@morganstanley.comNicolas J Mora +44 20 7425-2429

Nicolas.Mora@morganstanley.com +44 20 7677-5376

of the Bid for EZJ Oscar P Smyth

Research Associate

Oscar.Smyth@morganstanley.com +44 20 7425-6567

If Castlelake does take EZJ private, we think it is plausible that it Cedar Ekblom, CFA

supports pricing through cost discipline, rational capacity and EquityCedar.Ekblom@morganstanley.comAnalyst +44 20 7425-4623

capital efficiency rather than engaging in a fare war. Main

Transport

beneficiaries could be RYA/IAG. We see earnings upgrade Europe

potential for RYA, with upside to 2Q27 fare guidance and limited Industry View In-Line

near-term negative catalysts. OW

What happened? EZJ has agreed in principle to the financial terms of a potential

take-private by Castlelake, but the deal remains subject to pre-conditions with no

certainty that any firm offer will be made. Both parties agreed to extend the "put up

or shut up" deadline for a firm offer to August 3 at 5pm UKT. More here. If the bid

proceeds, Castlelake's strategic intentions remain unclear. Among many options, it

could continue operating EZJ while implementing restructuring measures, place

greater emphasis on SLB transactions or pursue a broader breakup of the business.

Below we examine two strategies that Castlelake could plausibly pursue.

Option 1 - Improve Fundamentals: An accelerated cost-saving program, fleet

upgauging, greater focus on higher-margin routes with capacity discipline and

further growth in ancillary/hols revenues are all potential levers Castlelake could

pull if it takes EZJ private.