easyJet has switched its preferred takeover backer from Castlelake to Apollo Global Management after the US investor put forward a higher offer for the airline.

The low-cost carrier said its board had withdrawn support for Castlelake’s earlier proposal and now regarded Apollo’s bid as more favourable for shareholders.

If completed, the deal would rank among the biggest transactions in European aviation in recent years.

easyJet did not say that a deal had been agreed, and the airline’s choice of preferred investor does not guarantee a takeover will follow. Apollo and Castlelake are both still part of the wider contest for control of the carrier.

The shift comes after a period of interest from private equity groups in one of Europe’s best-known budget airlines. easyJet, which flies millions of passengers a year across short-haul leisure and business routes, has long been seen as a potential target because of its valuable airport slots and established brand.

The board’s decision to back Apollo underlines the importance of price in any possible deal. In public takeover situations, boards often judge offers on the value delivered to shareholders, as well as the likelihood of a transaction closing.

easyJet has not disclosed the financial terms of either proposal, but the company said the Apollo offer is now the stronger one. That makes Apollo the front-runner in the current process, although the airline still faces a period of uncertainty while investors assess their next move.

Any acquisition would be closely watched across the aviation industry. A successful purchase of easyJet could reshape competition in short-haul travel across Europe, where airlines continue to recover from the pandemic while facing higher costs and pressure on fares.

For now, the airline remains listed and continues to operate as normal. The latest development marks a significant turn in a contest that could yet change again if the bidders revise their terms or if the board receives another approach.