The European aviation sector is entering a wave of consolidation after the global airline industry nearly halved its 2026 profit forecast, citing the Middle East conflict. EasyJet is nearing a US-led takeover that would take the carrier private well below its pre-pandemic valuation, with Apollo Global Management offering £7.15 per share and Castlelake £6.90. Spirit Airlines collapsed in May, and IATA director general Willie Walsh warned in June that further carriers would fail or be acquired if fuel prices remain elevated.
AirBaltic is scrambling for short-term financing to avoid default, facing a 30 million euro state credit repayment in August and an unreplenished reserve account tied to a 380 million euro bond due in 2029. Fitch has warned of rising credit default risk for the Latvian carrier, in which Lufthansa acquired a 10% stake for 14 million euros in early 2025.
Elsewhere, Aer Lingus announced up to 500 potential job cuts linked to a 6% capacity reduction, Norse Atlantic is undertaking a strategic review, and Airbus revised down its 20-year passenger aircraft demand forecast in July. Portugal plans to sell a 44.9% stake in TAP, with Lufthansa and Air France-KLM submitting binding offers by 29 July.