easyJet shareholders approved the airline's takeover by funds managed by Apollo on Wednesday 11 November. At the court-convened meeting, 97.07 percent of the scheme shares voted were cast in favour, and 289 of the 334 shareholders who voted backed the scheme1. At the general meeting that followed, the resolution passed with 96.67 percent1. Apollo's vehicle, Eagle Bidco, is paying £7.15 in cash per share, which values easyJet at approximately £5.7 billion2. The deal still needs court sanction and a list of regulatory clearances, and easyJet expects it to become effective before the end of the first quarter of 20271.

For the industry, the vote matters less than what comes next. Reuters describes the deal as one of the largest private equity buyouts of a European airline5. Whether its structure satisfies European ownership and control rules, and what the debt behind it means for crews, are the two questions running through the employee representatives' opinions published with the offer3.

Ownership rules shaped the whole structure

easyJet flies through three licensed carriers: easyJet UK, easyJet Europe in Austria and easyJet Switzerland. Each must be majority owned and effectively controlled by qualifying nationals, under EU Regulation 1008/2008 for the Austrian carrier, UK law for the British one and Swiss law for the Swiss one3. The vote itself showed the constraint at work. At the general meeting the board suspended voting rights on 233,921,894 shares held by non-EU persons, because EU ownership stood at only 35.07 percent1.

The deal is built around that limit. Apollo's funds will hold no more than 49.9 percent of the new holding company. Shareholders who roll their stake into unlisted shares, led by founder Sir Stelios Haji-Ioannou and his family with about 15.31 percent of easyJet, will hold 45.1 to 49.9 percent. An EU trust will hold up to 5 percent for a management incentive plan24. The shareholder agreement also contains provisions that let the company reallocate shares or reduce votes to stay compliant3.

Not everyone is convinced the cap settles the question. easyJet's European Works Council points to the European Commission's 2017 interpretative guidelines, which say a third-country stake above 30 percent "may, as a general rule, require an in-depth assessment" by the licensing authority3. It lists the indicators it wants regulators to look at, including Apollo's right to appoint the chair of the nine-member board and its reserved matters on capital and reorganisation, while stating that whether the structure is lawful is for the regulators to decide3. In August an EU official told Reuters that the bloc was preparing a review of airline ownership rules to stop foreign investors gaining effective control. "We need to make sure we have sufficient headroom when it comes to control," the official said6.

What is still outstanding

The two shareholder votes satisfied two conditions1. The others include confirmations on the operating licences from Switzerland's FOCA, Austro Control and the UK CAA, merger clearance in Austria, Egypt, Germany and from the UK's CMA, foreign investment approvals in countries including Austria, France, Italy, Malta and Spain, and a UK National Security and Investment Act check2. Court sanction comes after that. The long stop date is 6 August 20271.

What Apollo has done with airlines before

Apollo manages about US$1.05 trillion and lists equity investments in Sun Country Airlines, Aeromexico, Atlas Air Worldwide, Swissport and Barnes Aerospace, as well as financing for Air France-KLM, Virgin Atlantic, SAS and LATAM2. One recent example is Atlas Air: an Apollo-led group completed that acquisition in March 2023 at US$102.50 per share, taking over the operator of the world's largest Boeing 747 freighter fleet7.

The financing is where the unions focus. The offer is backed by commitments for up to £3,500 million of senior secured bridge facilities3. Apollo's funds will also subscribe £750 million to £1 billion of preference shares carrying a fixed 14 percent annual dividend, which rank ahead of the rollover shareholders2. After completion, easyJet group companies are to guarantee the acquisition debt and grant security over assets including aircraft and airport slots, BALPA notes3. Moody's placed easyJet's Baa2 rating on review for downgrade on 10 August, and S&P put its BBB+ rating on CreditWatch negative, both citing the expected rise in leverage3.

Pilot unions want binding commitments

Apollo says it does not intend to make headcount reductions that are material for the group in the 12 months after completion, that terms and pension rights will be safeguarded, and that the UK headquarters and the three AOCs stay where they are2. None of these are post-offer undertakings under Rule 19.5 of the Takeover Code, the unions point out3.

BALPA, which represents about 90 percent of easyJet's UK pilots, asks for exactly that: the headcount, terms and pension statements as binding undertakings, pilot representation on the Airline Management Board, a workforce equity scheme alongside the management plan and a meeting with Bidco now3. It argues that the gains lie in the design of the rostering optimiser, standby cover, leave allocation and the fatigue model, not in more effort from crews3. The easyJet Switzerland Pilots Association warns that leverage could make cost cuts, base changes, sale-and-leasebacks and outsourcing central levers for servicing debt3. Spain's SEPLA names lower aircraft allocation to Spanish bases and slower recruitment as possible changes after the first year3.

VNV, which represents easyJet pilots based in the Netherlands, is neutral on the deal but asks Apollo to state the intended size of the Amsterdam fleet and what it means for recruitment and career progression there3. It also objects to reports that pilots at easyJet's new Marrakech base would be hired as self-employed contractors through an intermediary, and says that model must not spread to other bases3.

Recruitment and the cadet pipeline

The offer documents do not mention easyJet's cadet programmes. In April, CAE announced a five-year extension of the Generation easyJet MPL programme, with the selected cadets due to start training in late 20268. What Apollo plans for growth will be worked out in the 12-month review with management after completion, which covers network optimisation among other levers2. SEPLA lists slower recruitment among the changes that could follow after the first year3. More on the airline's pilot roles is on our easyJet page.