Did Wizz bid for easyJet?

By | Category: Travel rumblings

That there is confidence in the travel market came with the news that easyJet received an unsolicited bid last week.

If easyJet was taken over passengers could see higher seat prices from the remaining low cost airlines

The gossip is that it was Wizz Air that made the bid although neither airline has confirmed or denied this.

To me it suggests that Wizz Air – if indeed it was the bidder – thinks firstly that easyjet shares are underpriced and secondly that the travel industry will pick up a pace in the future.

And if Wizz Air thinks that you can bet that others think the same.

But for the passenger the news might not be so good.

Why?

Because if a successful bid does materialise for easyJet, it removes one of the key no-frills airlines from the market and fares might rise higher than they already will do as we leave the pandemic’s worst effects on travel.

Such a move would not be good for travellers and holidaymakers if there is one fewer low cost airline. Largely just Wizz Air and Ryanair would remain.

But with the bid turned away and no share price rise, either the bid was not serious or was opportunistic.

During the pandemic, Wizz Air shares have risen so that they are 10% above pre-pandemic levels suggesting that the city gamblers view them as a good long term bet.

Wizz Air A-321
Did Wizz Air make a bid for easyJet?

easyJet shares, on the other hand are not far off being half of what they were!

That easyJet’s shares did not rise on the expectation that the bid would be matched by other companies in the market suggests that the city is not at all sure about easyJet -at least in the next year or so.

If a bid does come it is hoped that the Competition and Markets Authority will look to see if it is the best interests of the travelling public.

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