BA owner warns EU competition rules make easyJet bid 'very difficult'

IAG chief executive Luis Gallego said current EU competition rules would make a bid for easyJet “very, very difficult”, arguing that Brussels should rethink how it reviews airline mergers.

The comments, published by the Financial Times on Thursday, add fresh pressure to a debate over whether Europe’s airline sector should be allowed to consolidate more aggressively.

Castlelake bid window

Castlelake, the US private credit group, said in early June that it was considering a possible takeover of easyJet. Under UK takeover rules, it has until June 26 to announce whether it will make a formal offer.

EasyJet has said any approach would face major regulatory, financial and execution hurdles, while also saying it would consider any firm proposal.

The Guardian reported earlier this month that easyJet called Castlelake’s interest “highly opportunistic” and said its share price had been affected by tensions in the Middle East and higher jet fuel prices.

Why the rules matter

Gallego said aviation needs more consolidation and urged the European Commission to change how it assesses airline mergers, including giving greater weight to competition between hub airports.

That warning matters because EU ownership rules require European airlines to be majority owned by investors within the region, which could complicate a Castlelake-led bid on its own.

IAG’s chief is also speaking from experience. The group abandoned its attempt to buy the rest of Air Europa in 2024 after European Commission competition concerns.

IAG owns British Airways, Iberia, Aer Lingus and Vueling.

What to watch next

The immediate decision point is whether Castlelake files a formal easyJet offer by June 26.

If it does, the structure of any bid will be closely watched for signs of a European partner or other arrangement that could help satisfy ownership rules and ease regulatory concerns.