Apollo’s £5.7bn easyJet bid highlights undervalued assets at Jet2, IAG Loyalty
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Apollo Global Management’s £5.7 billion offer for easyJet, whose takeover saga culminated last week, highlights the gap between airline valuations and their balance sheets and hard assets. Jet2 trades at 1.1 times RBC’s projected March 2028 book value, below peers at 1.7 times, while Citi estimates IAG Loyalty could be worth up to €13 billion.
The easyJet Takeover
Apollo Global Management offered £5.7 billion for easyJet, an 81% premium to the carrier’s undisturbed price. Before rival Castlelake announced its interest in May, easyJet traded below net asset value and at 6 times forward earnings, according to LSEG data, far below pre-pandemic double-digit multiples. The deal, whose takeover saga culminated last week, was partly driven by easyJet’s rock-solid balance sheet and hard assets including aircraft and engines.
Jet2's Conservative Value
Jet2, a £3 billion company, reported £2 billion in net cash as of March and has over 100 new Airbus aircraft due in coming years. RBC analysts estimate book value per share could reach £13.80 by March 2028, meaning Jet2 trades at 1.1 times that figure. Peers are valued around 1.7 times based on Visible Alpha forecasts, suggesting Jet2’s discount may be too steep given its package holiday niche and financial conservatism.
Non-Flying Assets
IAG Loyalty generates revenue by selling Avios points to partners including American Express; Citi analysts calculated in June the unit could be worth up to €13 billion. That valuation would leave the core airline part of IAG worth €14 billion, or 4 times its forecast 2026 operating profit. Lufthansa Technik, the maintenance arm of Deutsche Lufthansa, is another example of hidden value, benefiting from aircraft delivery delays.
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