European Airlines: Strategic buyers for easyJet: Regulatory hurdles make it unlikely in its current form but we see Lufthansa as most feasible

Research evidence excerpt

European Airlines: Strategic buyers for easyJet: Regulatory hurdles make it unlikely in its current form but we see Lufthansa as most feasible

Harry J Gowers AC Europe Equity Research

(44-20) 7134-7522 29 July 2026 J P M O R G A N

harry.gowers@jpmorgan.com

• (2) Market overlap is enough to potentially hinder a transaction; Lufthansa looks

most feasible. We estimate IAG has the highest capacity overlap with easyJet at c37%

of its short-haul capacity, with Lufthansa the lowest at c15%. For all three Flag Carriers

a combination would create a significant amount of city pair routes with >50% market

share which may generate heavy regulatory scrutiny, totalling c36% of short-haul

capacity for IAG, c28% for Air France-KLM and c8% for Lufthansa. We estimate Air

France-KLM would create the most new monopoly routes at close to 50 city pairs (or c7%

of its short-haul capacity). Lufthansa has the lowest overlap with easyJet and lowest

amount of capacity potentially triggering slot remedies, however it would combine large

existing positions at Milan Linate and Geneva. In the most recent precedent transaction

(Lufthansa-ITA), the EC saw competition significantly impeded on multiple short-haul

routes out of Milan and Rome with combined market shares generally >65%. Given the

relative size of easyJet and the Flag Carriers on various large city pairs and slot

constrained airports, it seems likely the level of slot remedies required by the EC could

limit the likelihood or attractiveness of any potential acquisition for IAG and Air France-

KLM, whereas Lufthansa’s network is more complimentary.

• (3) easyJet has an attractive fleet but we don’t see a strategic necessity to access it.

easyJet runs an all-Airbus narrowbody fleet consisting of ~360 aircraft with firm orders