War in the Middle East hurts consumer confidence, easy Jet profits plummet by more than two-thirds
Private equity Apollo Capital made a £5.7 billion acquisition offer, and British low-cost airline EasyJet disclosed that its performance had been hit by the conflict in the Middle East: rising fuel costs, weakening public confidence in travel and consumption, and the company's profits fell by more than two-thirds. The Luton-based airline released its financial results on Thursday: profit before tax for the three months to the end of June was 85 million pounds, compared with 286 million pounds in the same period last year; however, the performance was better than analysts expected. The company also said that with the peak summer travel season approaching, demand for air ticket bookings is picking up. Earlier, there was news that the European Union was about to restart the regulatory review of aviation company ownership, and the market was worried that acquisition transactions would be blocked. Affected by this, easyJet's share price fell as much as 14% on Wednesday. This month, easyJet's board recommended Apollo's £5.7 billion takeover bid, which was higher than US credit private equity firm Castlelake's £5.5 billion proposal. EasyJet chief executive Kenton Jarvis denied regulatory scrutiny would hinder the takeover. He said that the company "has not received any formal notification from the EU" and that the EU's full review process is time-consuming and "will be far longer than the validity period of Apollo's acquisition offer." According to the acquisition schedule, Castlelake can submit a new round of bids no later than August 3, which will be its sixth bid; according to British merger and acquisition regulations, Apollo must finalize a binding formal acquisition plan before August 7, otherwise this invitation will automatically be invalidated. EasyJet said consumer confidence has improved and 68% of its capacity has been pre-sold in the fourth quarter (three months to September). Jarvis mentioned that passengers began to book tickets longer in advance, and "consumers are still willing to prioritize travel and choose our cost-effective fares." The company's fuel expenses this quarter increased by 105 million pounds compared with the same period in 2025; however, passengers have become more cautious, and the company has to maintain low ticket prices to stimulate demand. "If we were to pass on all the fuel costs to fares, airfares would go up significantly," Jarvis said. Competing low-cost airline Ryanair also disclosed on Monday that the war in the Middle East had a similar impact on its performance. The Dublin-based airline's net profit after tax for the three months to June was 538 million euros, down 34% from the same period in 2025 and below analysts' expectations of 579 million euros. London Heathrow Airport also released a financial report on Thursday, saying that passenger traffic weakened in the second quarter and warned: "Before the geopolitical turmoil subsides, global airlines There is a high probability that the flow will continue to be under pressure. "