It’s time to put easyJet out of its misery

Flights have been canceled at short notice. Cabin crew have been threatening to strike. Even the snacks and sandwiches have had to be scrapped, making the couple of hours you spend in a bright orange metal tube before starting your holiday even more dismal than usual.

EasyJet has never pretended to be a luxury experience, but even by its own standards it is having a miserable, chaotic summer — not just for passengers, but for its shareholders as well.

Amid a booming travel industry, with everyone desperate to start seeing the world again, its shares are languishing at a ten-year low.

Surely the time has come to put the airline out of its misery? Bill Franke, the 85-year-old billionaire who is one of the key backers of Wizz Air, has just lost out in the bidding war for Spirit Airlines and clearly has money to burn right now.

Alternatively, one of the other big American or Asian airlines could well be interested, or perhaps even Ryanair, although it seems unlikely that competition authorities would allow it to buy its main rival.

The important point is surely this. EasyJet is in such dire straits right now that there will never be a better time to strike.

True, buying an airline may seem bonkers, but for any tycoon who wants to take a contrarian view, and bet that the industry can only get better, this is surely the moment to make a once-in-a-decade move.

While the aviation industry headlines on this side of the Atlantic have been filled with stories of canceled flights and staff shortages, in the US they have been dominated by takeover battles.

This week a long-running contest for the budget carrier Spirit Airlines was finally won by JetBlue, run by the former British Airways director Robin Hayes, with a $3.8bn (£3.1bn) offer.

Its opponent? Frontier, the airline backed by Bill Franke, who just happens to be one of the cornerstone backers of Wizz Air, itself a fast-growing presence in the European market.

Spirit would have been Franke’s first choice for his next round of expansion. But since he has failed in an offer for that airline, he clearly has money to spend right now and will no doubt be looking for another target.

It is only last year that Wizz Air, in which Franke is a key investor, made an audacious approach for easyJet.

The exact price was never formally disclosed, but was rumored to be around 800p a share, and since the share price was above 700p last summer it is unlikely to have been much below that.

As it happened, easyJet rejected the approach, tapping up its shareholders for an extra £1.2bn instead.

Most of them are probably regretting that decision. Not only did they miss out on the chance to cash in their shares at 800p a pop — and probably more if a bidding war had got underway — but the stock has also declined significantly on the rights issue price.

Over the course of this year, the airline’s shares are down by 35pc, and are now trading below 400p, the lowest price in a decade airlines, a far worse performance than Ryanair (down 22pc so far this year) or indeed British owner IAG ( down by 25pc in 2022).

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