European Airlines X Airports: easy(jet) choice. Break-up beats restructuring, expect tighter capacity ahead

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European Airlines X Airports: easy(jet) choice. Break-up beats restructuring, expect tighter capacity ahead

Alex Irving, CFA +44 20 7676 7044 alex.irving@bernsteinsg.com 8 July 2026

INVESTMENT IMPLICATIONS

• easyJet refresher. easyJet operates in a European market dominated by a handful of large airline groups and low-cost

carriers, with the company accounting for roughly 10% of intra-European capacity. Over the past two decades, it has

evolved into a more diversified pan-European airline, although the UK remains its largest market at 33% of capacity.

Despite this broader geographic footprint, capacity remains concentrated at key airports, particularly Gatwick, Geneva

and Milan Malpensa, where easyJet benefits from strong market positions. Beyond the airline, easyJet Holidays has

emerged as a meaningful profit contributor, accounting for 38% of group PBT in 2025.

• Justifying the acquisition at £6.90 without a break-up demands belief in a heroic restructuring. The 690p offer looks

demanding. easyJet, like most airlines, has long struggled to earn its cost of capital, as unit cost has remained stubbornly

high. Comparing the terminal ROIC and EV/IC of the individual European airlines, we calculate that for the deal to make

sense at the proposed price would require belief in a ROIC of at last 9.9% by 2030: a level not unheard of in airlines.

IAG and Ryanair clear that bar comfortably. For easyJet, that requires CASKx falling over five years, airline EBIT more

than tripling and margin more than doubling from 2025 to 2030. Restructurings are hard, and frequently fail — this one

would be a heroic undertaking, with in our view a slim chance of success. In that context, the offer looks expensive.

• An eventual break-up is the logical end state.