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FFRF Warns DOJ Seeks to Force Taxpayers to Fund Religious Proselytizing
MADISON, Wisconsin, Aug. 29 -- The Freedom From Religion Foundation issued the following news release:
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FFRF warns DOJ seeks to force taxpayers to fund religious proselytizing
The Freedom From Religion Foundation is condemning a sweeping new Department of Justice legal opinion that seeks to dramatically expand the ability of religious groups to use federal taxpayer dollars for all sorts of religious activities.
The Aug. 25 memorandum from the Justice Department's Office of Legal Counsel, titled "Constitutionality of Religious Restrictions on the Use of Federal Funds," claims that federal
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MADISON, Wisconsin, Aug. 29 -- The Freedom From Religion Foundation issued the following news release:
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FFRF warns DOJ seeks to force taxpayers to fund religious proselytizing
The Freedom From Religion Foundation is condemning a sweeping new Department of Justice legal opinion that seeks to dramatically expand the ability of religious groups to use federal taxpayer dollars for all sorts of religious activities.
The Aug. 25 memorandum from the Justice Department's Office of Legal Counsel, titled "Constitutionality of Religious Restrictions on the Use of Federal Funds," claims that federalrestrictions preventing taxpayer dollars from being used for explicitly religious purposes are presumptively unconstitutional. The opinion essentially dictates that the First Amendment's Free Exercise Clause trumps the Establishment Clause, which Thomas Jefferson famously explained builds "a wall of separation between church and state."
"The First Amendment does not require the government to bankroll prayer, preaching or proselytizing, and FFRF will vigorously oppose efforts to turn federal programs into taxpayer-funded ministries," says FFRF Co-President Annie Laurie Gaylor. "Faith-based organizations are free to practice and promote their religion, but religious freedom does not come with a right to have taxpayers pick up the tab."
The opinion focuses on federal programs administered by the Department of Health and Human Services, including programs involving child care, substance abuse treatment, welfare services and other social services. Existing federal laws still restrict the use of direct government funding for "sectarian worship, instruction, or proselytization." HHS regulations require explicitly religious activities to be offered separately in time or location from federally funded services and make participation voluntary.
The memo complains, for example, that a church operating a federally supported soup kitchen cannot conduct communal prayer as part of the taxpayer-funded meal service. Nor can a religious organization providing federally funded employment or family programs incorporate religious teachings into those programs. The Office of Legal Counsel contends that those safeguards discriminate on the basis of religion.
Those implications extend far beyond soup kitchens.
The opinion states that religious recipients cannot constitutionally be required to "forgo[], segregat[e], or bifurcat[e] their religious activities" in order to participate in a generally available federal program. It argues that a secular organization may promote its values through a federally funded sex education program, for example, so a religious provider must likewise be permitted to teach its religious views about sexuality.
Perhaps most shocking, the memo offers the example of a government-funded STEM program. While the government could limit funding to STEM education, the opinion asserts that it would still be "obligated to allow religious providers to integrate their faith into STEM instruction," including by teaching "the relationship between faith and science or the theological basis for mathematics."
"That example lays bare just how extreme this theory is," says FFRF Deputy Legal Director Liz Cavell. "Equal eligibility for a government benefit is one thing. Claiming a constitutional right to convert the government-funded program itself into a vehicle for religious teaching is something else entirely."
The opinion relies heavily on the Supreme Court's recent decisions in Trinity Lutheran v. Comer, Espinoza v. Montana Department of Revenue and Carson v. Makin, which prohibit governments from excluding religious institutions from certain generally available public benefit programs. But the DOJ opinion goes significantly further. Carson, for instance, involved tuition assistance reaching religious schools through private parental choice. The memo acknowledges that distinction but declares that the mechanism by which government funding reaches a religious institution is "constitutionally irrelevant."
The memo similarly attempts to sweep aside longstanding Supreme Court precedent recognizing special Establishment Clause concerns when the government makes direct payments to religious institutions. Rather than point to a Supreme Court decision expressly overruling that precedent, the Office of Legal Counsel calls the traditional distinction between direct and indirect government funding "fruit of the poisoned Lemon tree." (This is a reference to the Lemon Test, which the current Supreme Court recently abandoned and which declared that to be constitutional, a government action or program required a secular purpose, should neither advance nor inhibit religion and must avoid excessive government entanglement with religion.)
FFRF warns that abandoning that distinction between direct and indirect funding will transform federal social service programs into government-financed vehicles for evangelism. FFRF identifies serious threats to social service recipients:
* The programs implicated by the opinion serve some of society's most vulnerable people. A person seeking food, shelter, child care, suicide prevention or addiction treatment should not have to navigate taxpayer-funded religious exercises to obtain government-supported assistance.
* The memo targets protections against religious discrimination. It would erase existing HHS rules prohibiting recipients of direct federal assistance from discriminating against beneficiaries because of their religion, religious beliefs, refusal to hold a religious belief or refusal to participate in a religious practice.
* The opinion objects to a federal child care provision barring discrimination, characterizing those protections as burdens on religious exercise. Currently, certain heavily government-funded religious providers may not discriminate on the basis of religion in specified employment and admissions decisions.
Religious organizations could increasingly claim both a constitutional right to conduct religious activities with taxpayer funding and a religious right to discriminate while administering publicly funded programs.
The opinion's historical analysis is equally troubling. The memo invokes early federal programs that financed Christian missionaries working among Native Americans, including federal support for clergy, religious instruction and church construction. These shameful programs are hardly evidence of a settled constitutional tradition permitting government-funded religion; they were part of a broader federal policy using Christianity to suppress Indigenous religion, peoples and cultures, and advance explicitly sectarian aims that are constitutionally indefensible today.
Most immediately, the opinion could pave the way for HHS to stop enforcing statutes Congress enacted. The Office of Legal Counsel concludes that the religious restrictions are unconstitutional and severable from their underlying programs, and expressly contemplates HHS adopting a policy of nonenforcement and reporting that decision to Congress.The threat also extends beyond HHS. The opinion repeatedly frames its conclusions broadly, declaring that restrictions on the anticipated religious use of funds in "generally available federal funding programs" are presumptively unconstitutional.
FFRF will closely monitor HHS for changes to its regulations, grant requirements and beneficiary protections, as well as any decision to refuse enforcement of existing federal law.
"James Madison, the primary architect of our godless Constitution, famously (and successfully) argued that citizens should not be forced to pay 'even three pence' in support of religious establishments. He'd be rolling in his grave at the memo's outrageous distortion of constitutional law," Gaylor concludes.
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The Freedom From Religion Foundation is a U.S.-based nonprofit dedicated to defending the constitutional principle of separation between state and church and educating the public on matters relating to nontheism. With about 41,000 members, FFRF is the largest association of freethinkers (atheists, agnostics and humanists) in North America. For more information, visit ffrf.org.
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Original text here: https://ffrf.org/news/releases/ffrf-warns-doj-seeks-to-force-taxpayers-to-fund-religious-proselytizing/
[Category: Religion]
FFRF Disburses More Than $17,000 to First in the Family Student Essay Winners
MADISON, Wisconsin, Aug. 29 -- The Freedom From Religion Foundation issued the following news release:
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FFRF disburses more than $17,000 to First in the Family student essay winners
The Freedom From Religion Foundation is proud to announce the 11 top winners and nine honorable mentions of the 2026 David Hudak Memorial First in the Family Student Essay Competition. FFRF has paid out a total of $17,650 in award money for the contest this year.
Students who will be first in their family to attend either a two- or four-year college or university and who are ages 17-21 were asked to write on
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MADISON, Wisconsin, Aug. 29 -- The Freedom From Religion Foundation issued the following news release:
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FFRF disburses more than $17,000 to First in the Family student essay winners
The Freedom From Religion Foundation is proud to announce the 11 top winners and nine honorable mentions of the 2026 David Hudak Memorial First in the Family Student Essay Competition. FFRF has paid out a total of $17,650 in award money for the contest this year.
Students who will be first in their family to attend either a two- or four-year college or university and who are ages 17-21 were asked to write onthe topic of "Why white supremacy goes hand in hand with Christian nationalism."
Winners, their ages, the colleges or universities they are attending and the award amounts are listed below. (FFRF seeks to distribute essay scholarship monies to a higher number of students, so ties are not regarded in the typical tie fashion.) The winning essays are linked below.
FIRST PLACE
Nyla Woods, 21, University of Kansas, $3,500.
SECOND PLACE
Isaiah Lopez Ruiz, 21, Paradise Valley Community College, $3,000.
THIRD PLACE
Anastasia Gonzalez, 19, Harvard University, $2,500.
FOURTH PLACE
Angelle Jean-Pierre, 18, Howard University, $2,000.
FIFTH PLACE
Antonio Drain, 18, University of Central Oklahoma, $1,500.
SIXTH PLACE
Carina Reyes-Ortiz, 18, West Chester University, $1,000.
SEVENTH PLACE
Cha'Miah Phoenix, 19, UCLA, $750.
EIGHTH PLACE
Yusef Houssein, 19, Saint Joseph University, $500.
NINTH PLACE (tie)
Jayda Gaither, 18, East Carolina University, $400.
Samani Ismail, 18, University of Berkeley, $400.
TENTH PLACE
Laila Coutou, 20, New York University, $300.
HONORABLE MENTION ($200 each)
Mariana Catalan, 18, University of Houston
Christine Cowing, 18, Montana State University - Billings
Brooklyn Dosen, 21, Cochise College
Cash Guello, 18, University of North Georgia
Gabrielle Horsley, 18, North Carolina Agricultural and Technical State University
Jackson Manis, 18, University of Texas
Iman Merchent, 17, University of Texas
Kira Saintvil, 18, Rochester Institute of Technology
Kason Steward, 18, Sacramento State University
FFRF thanks Lisa Treu for managing the infinite details of this (and FFRF's other essay competitions). FFRF would also like to thank our volunteer and staff readers and judges, including: Don Ardell, Dan Barker, David Chivers, Wrenna Fine, Jon Galehouse, Annie Laurie Gaylor, Ricki Grunberg, Susan Haines, Linda Josheff, Kevin Kirby, Jeffrey LaVicka, Sammi Lawrence, Robert Leonhard, Tom Ludwinski, Katya Maes, David Malcolm, Tori Mizerak, Jason Mosebach, Henry Mongrain, Chris O'Connell, Andrea Osburne, Brooks Rimes, Kathy Rogers, Rose Mary Sheldon, PJ Slinger, Michelle Smith and Matthew Woodruff.
This contest is named for the late David Hudak, an FFRF member who left a bequest to generously fund a student essay contest.
FFRF has offered essay competitions to students of color (now first in the family to attend college) since 2016. It has also offered essay contests open to all college students since 1979, college-bound high school seniors since 1994, grad students since 2010 and one for law students since 2019.
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The Freedom From Religion Foundation is a U.S.-based nonprofit dedicated to defending the constitutional principle of separation between state and church and educating the public on matters relating to nontheism. With about 41,000 members, FFRF is the largest association of freethinkers (atheists, agnostics and humanists) in North America. For more information, visit ffrf.org.
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Original text here: https://ffrf.org/news/releases/ffrf-disburses-more-than-17000-to-first-in-the-family-student-essay-winners/
[Category: Religion]
WLF Urges Supreme Court to Clarify Limits of CERCLA Liability
WASHINGTON, Aug. 28 [Category: Law/Legal] -- The Washington Legal Foundation issued the following news release:
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WLF Urges Supreme Court to Clarify Limits of CERCLA Liability
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Click here to read WLF's brief.
(Washington, DC)-Washington Legal Foundation (WLF) today urged the U.S. Supreme Court to grant review of a Ninth Circuit decision that dramatically expands the scope of recoverable damages in key environmental cases.
The case arises from a claim brought by the Confederated Tribes of the Colville Reservation under the Comprehensive Environmental Response, Compensation, and Liability
... Show Full Article
WASHINGTON, Aug. 28 [Category: Law/Legal] -- The Washington Legal Foundation issued the following news release:
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WLF Urges Supreme Court to Clarify Limits of CERCLA Liability
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Click here to read WLF's brief.
(Washington, DC)-Washington Legal Foundation (WLF) today urged the U.S. Supreme Court to grant review of a Ninth Circuit decision that dramatically expands the scope of recoverable damages in key environmental cases.
The case arises from a claim brought by the Confederated Tribes of the Colville Reservation under the Comprehensive Environmental Response, Compensation, and LiabilityAct (CERCLA), the so-called Superfund law. Under CERCLA, the federal, state, and tribal governments are authorized to bring cases against Superfund owners and operators for injuries derived from the "loss of natural resources" after the release of a hazardous substance. The Tribes prevailed in the Ninth Circuit on the argument that a community's cultural disconnection from a damaged natural resource constitutes a recoverable injury.
WLF's brief explains why that's wrong. Cultural-loss injury isn't contemplated by the statute, which was designed to ensure the rapid restoration of damaged air, land, or water. And since cultural loss can't be predictably priced or insured against, the Ninth Circuit's rule invites essentially random damages awards. That uncertainty will unduly deter beneficial economic activity.
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Original text here: https://www.wlf.org/2026/08/28/communicating/wlf-urges-supreme-court-to-clarify-limits-of-cercla-liability/
OMRF marks 80 years of scientific discoveries
OKLAHOMA CITY, Oklahoma, Aug. 28 -- The Oklahoma Medical Research Foundation posted the following news:
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OMRF marks 80 years of scientific discoveries
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Most mornings, the Gaylord Pavilion at the Oklahoma Medical Research Foundation is relatively empty, with the occasional staff member or patient passing through.
But on Friday morning, that space was anything but empty.
Hundreds of boisterous OMRF employees, all donning identical T-shirts, gathered for group photos to commemorate the foundation's 80th birthday. "What a moment!" said OMRF President Andrew Weyrich, Ph.D., surrounded by
... Show Full Article
OKLAHOMA CITY, Oklahoma, Aug. 28 -- The Oklahoma Medical Research Foundation posted the following news:
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OMRF marks 80 years of scientific discoveries
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Most mornings, the Gaylord Pavilion at the Oklahoma Medical Research Foundation is relatively empty, with the occasional staff member or patient passing through.
But on Friday morning, that space was anything but empty.
Hundreds of boisterous OMRF employees, all donning identical T-shirts, gathered for group photos to commemorate the foundation's 80th birthday. "What a moment!" said OMRF President Andrew Weyrich, Ph.D., surrounded bystaffers who laughed and whooped in celebration.
"The fact that OMRF exists today," Weyrich said, "is a tribute to our entire state."
On Aug. 28, 1946, Oklahoma's secretary of state granted OMRF's corporate charter, and the nonprofit foundation was officially born. But the real work would come over the next few years, when 7,500 Oklahomans made gifts that enabled OMRF to open its doors in 1950.
"It's an amazing story," Weyrich said. "We're the only biomedical research institute in America that got its start with a statewide campaign."
What began in 1946 as a two-person operation has grown into an internationally recognized research institute. OMRF now employs more than 500 staff members working to develop new ways to prevent and treat diseases of aging, autoimmune illnesses, cancer and heart disease.
The foundation treats thousands of patients living with diseases like multiple sclerosis and lupus, and a trio of life-changing drugs born in OMRF labs are now available in hospitals and clinic throughout the U.S.
That track record resonates with the foundation's staff, who have voted OMRF one of Oklahoma's Top Workplaces every year since independent consulting firm Energage began surveying the state's workforce in 2013.
Debi Gibson is marking her 50th year at OMRF. She began as a data entry clerk and rose to become the foundation's payroll manager.
For her, the foundation's mission of helping people live longer, healthier lives serves as a north star. She was particularly moved when an OMRF scientist spoke about his efforts to save infants with a rare blood disorder. "I remember thinking, 'Who wouldn't want to be part of this?'," she said.
That sentiment is shared by Lisa Nelms, OMRF's accounting director. Like Gibson, Nelms is marking her 50th anniversary at OMRF this year.
"If you let it, OMRF becomes part of you," Nelms said.
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Original text here: https://omrf.org/omrf-marks-80-years-of-scientific-discoveries/
Hispanic Access Brings Together 200+ Leaders to Put Communities at the Center of California's 30x30 Goals
WASHINGTON, Aug. 28 -- The Hispanic Access Foundation issued the following news release on Aug. 27, 2026:
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Hispanic Access Brings Together 200+ Leaders to Put Communities at the Center of California's 30x30 Goals
More than 200 community leaders, government officials, conservation advocates, academics and philanthropic partners gathered today at the Natural History Museum of Los Angeles County for Pathways to 30x30 and Beyond: Urban Nature, a convening focused on the role communities and cities can play in advancing California's goal of conserving 30% of its lands and waters by 2030. Hosted
... Show Full Article
WASHINGTON, Aug. 28 -- The Hispanic Access Foundation issued the following news release on Aug. 27, 2026:
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Hispanic Access Brings Together 200+ Leaders to Put Communities at the Center of California's 30x30 Goals
More than 200 community leaders, government officials, conservation advocates, academics and philanthropic partners gathered today at the Natural History Museum of Los Angeles County for Pathways to 30x30 and Beyond: Urban Nature, a convening focused on the role communities and cities can play in advancing California's goal of conserving 30% of its lands and waters by 2030. Hostedby Hispanic Access Foundation, the Natural History Museum of Los Angeles County and UCLA Sustainability, the convening brought leaders across sectors together to strengthen connections, elevate community-driven solutions and explore how urban conservation can protect biodiversity, build climate resilience and connect more families to nature.
The event spotlighted Pathway 9 of California's 30x30 strategy, which recognizes the importance of protecting "in-between" spaces--including farms, ranches, suburban neighborhoods and urban areas--that connect natural areas and support biodiversity. Through conversations highlighting efforts across the City and County of Los Angeles and throughout California, participants explored how local leadership, cross-sector partnerships and community advocacy can help shape the decisions, policies and investments that affect communities and conservation.
By creating space for community leaders to exchange ideas, build relationships and engage directly with decision-makers, the convening highlighted the importance of ensuring that the people closest to these issues have a meaningful role in shaping solutions.
"Latino leaders already have the knowledge, relationships and solutions to address the challenges facing their communities. Our role is to walk alongside them--connecting leaders to one another and to the systems where decisions are made so they can turn community-driven solutions into lasting change," said Maite Arce, President and CEO of Hispanic Access Foundation. "Achieving 30x30 requires communities to be more than participants in conservation. They must have the opportunity and influence to help shape what conservation looks like in the places they call home."
That approach is central to Hispanic Access Foundation's work to cultivate Latino leadership and strengthen the relationships and networks that help communities turn local knowledge and solutions into collective action and lasting impact.
Participants included Wade Crowfoot, Secretary of the California Natural Resources Agency; Randall Winston, Deputy Mayor of Public Works for the City of Los Angeles; Rita Kampalath, Chief Sustainability Officer for the County of Los Angeles; Miguel Luna, Chief Administrative Officer for the Fernandeno Tataviam Band of Mission Indians; Anthony Redblood Morales, Chief of the Gabrieleno Tongva-San Gabriel Band of Mission Indians; Lori Bettison-Varga, President and Director of the Natural History Museum of Los Angeles County; Maite Arce, President and CEO of Hispanic Access Foundation; and Nurit Katz, Chief Sustainability Officer at UCLA.
Pathways to 30x30 and Beyond: Urban Nature underscored that lasting conservation solutions are strongest when communities are connected, their leadership is valued and they have opportunities to help shape the decisions that affect the places they call home.
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Original text here: https://www.hispanicaccess.org/news-releases/3134-hispanic-access-brings-together-200-leaders-to-put-communities-at-the-center-of-californias-30x30-goals
Health Foundation Responds to Latest ONS Figures on NEETs
LONDON, England, Aug. 28 -- The Health Foundation issued the following statement by policy and research manager Sam Atwell:
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The Health Foundation responds to latest ONS figures on NEETs
Responding to the latest ONS figures showing that 13% of 16 to 24-year-olds are not in education, employment or training (NEET), Sam Atwell, Policy and Research Manager at the Health Foundation, said:
'While today's figures point to a slight fall in the number of 16 to 24-year-olds not in employment, education or training (NEET), they also show that too many young people are still struggling to establish
... Show Full Article
LONDON, England, Aug. 28 -- The Health Foundation issued the following statement by policy and research manager Sam Atwell:
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The Health Foundation responds to latest ONS figures on NEETs
Responding to the latest ONS figures showing that 13% of 16 to 24-year-olds are not in education, employment or training (NEET), Sam Atwell, Policy and Research Manager at the Health Foundation, said:
'While today's figures point to a slight fall in the number of 16 to 24-year-olds not in employment, education or training (NEET), they also show that too many young people are still struggling to establishthemselves in work or education. Spending long periods neither earning nor learning can have lasting consequences for young people's health, incomes and future opportunities.
'Poor health is an increasingly important part of this picture. Our figures show that nearly half of young people who are NEET now report a health condition that limits their ability to work, making it harder for many to find and sustain the right opportunity.[1]
'If we want to meaningfully prevent young people falling out of work or education, government needs to act earlier through stronger support in schools and better help to overcome barriers and find their next step. This must be matched by enough good entry-level jobs for young people to start and build their careers.
'Alan Milburn's final report into NEETs and Peter Fonagy's review into the prevalence of mental health and neurodevelopmental conditions, both due to report this autumn, should prompt government to build a system that gives young people the support and opportunities they need to manage their health and participate in work or education.'
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Notes to editors
1. Why are a growing number of young people who are NEET reporting work-limiting health conditions? (https://www.health.org.uk/reports-and-analysis/analysis/why-are-a-growing-number-of-young-people-who-are-neet-reporting-work)
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Original text here: https://www.health.org.uk/media-office/press-releases/the-health-foundation-responds-to-latest-ons-figures-on-neets
Foundation for Economic Education Posts Commentary: EU Regulations May Block EasyJet Sale
DETROIT, Michigan, Aug. 28 -- The Foundation for Economic Education issued the following commentary by freelance journalist and critic Mark Nayler:
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A Hostile Takeover?
EU regulations may block easyJet sale.
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On August 6, the budget airline easyJet formally announced its acceptance of a pound sterling5.7 billion ($7.7 billion) takeover bid from the US private equity firm Apollo Global Management. Apollo topped a rival offer of pound sterling5.5 billion ($7.5 billion) from Castlelake (another US private equity firm), and received the backing of easyJet's Cypriot-British founder Stelios
... Show Full Article
DETROIT, Michigan, Aug. 28 -- The Foundation for Economic Education issued the following commentary by freelance journalist and critic Mark Nayler:
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A Hostile Takeover?
EU regulations may block easyJet sale.
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On August 6, the budget airline easyJet formally announced its acceptance of a pound sterling5.7 billion ($7.7 billion) takeover bid from the US private equity firm Apollo Global Management. Apollo topped a rival offer of pound sterling5.5 billion ($7.5 billion) from Castlelake (another US private equity firm), and received the backing of easyJet's Cypriot-British founder SteliosHaji-Ioannou, whose family retains a 15% stake in the company. If completed, the deal would return the airline to private ownership after 26 years on the London Stock Exchange--but doubts about its compliance with EU regulations look likely to delay the process.
Under EU law, European airlines must be majority-owned by EU citizens or entities. On July 22, Reuters reported that the EU Commission is scrutinizing the Apollo bid to ensure that it complies with these regulations, causing easyJet's shares to drop by almost 12%. They have since rebounded, but would likely take another hit if the EU Commission blocks or delays Apollo's takeover. If Brussels gives its approval, the deal is expected to be finalized by March 2027 (assuming also that it receives majority approval from easyJet's shareholders).
This is a reversal of the situation after the 2016 Brexit referendum, when the airline itself was placed under scrutiny by EU officials. Following Britain's vote to leave the EU, both easyJet and Ryanair were told by Brussels that they needed to relocate their headquarters and/or sell the majority of their shares to EU citizens in order to keep operating across the continent. easyJet solved the problem by opening a European office in Vienna, although its overall base of operations has remained in Luton, 30 miles north of London. New York-based Apollo has revealed few details about how it proposes to adhere to Europe's airline ownership regulations, under which its stake is capped at 49.9%.
Some aviation experts have noted that Apollo could satisfy Brussels by leaving majority voting rights with EU stakeholders, but still restructure or break up the airline to gain overall economic control. It would probably take the EU years to review the new ownership structures, prompting one analyst to tell Reuters: "It might even be that Apollo achieves its target of exiting and relisting easyJet by 2034 with a 20%+ return before the EU has worked out its review."
Ownership and antitrust legislation are the main reasons why there has been just one serious attempt to acquire easyJet in recent years, from rival low-cost carrier Wizz Air in 2021. But the company's attractiveness to investors is obvious. Founded in 1995 by the then-28-year-old Ioannou, easyJet initially operated just two routes, from Luton to Glasgow and Edinburgh. Easily recognizable with its distinctive orange-and-white branding, its 356 aircraft now transport almost 100 million passengers between 164 European destinations annually. In 2025, easyJet posted pre-tax profit of pound sterling665 million ($901 million), a 9% increase on 2024 and the third consecutive year of growth. The airline's operating margins increased from 5.8% in 2023 to 7% last year, boosted by its package-holiday operation, easyJet holidays. Last year, this part of the business generated 38% of easyJet's total profits on around 11-12% of the revenue.
easyJet also has assets that could potentially be broken up and sold off to increase the return on Apollo's investment. A 2024 study by the International Air Transport Association found that 60% of the world's commercial aircraft are leased rather than owned by airlines, a figure that rises to almost 70% in Europe. easyJet, however, owns 205 of its 356 planes, equivalent to 58%. It also holds valuable departure and arrival slots at several of Europe's most congested airports, including Gatwick (London), Paris, Milan, and Amsterdam, and has increased its capacity in this area by 20% compared to pre-pandemic levels. These slots are big business in themselves: in 2016, Oman Air paid Air France-KLM a record $75 million for a pair of slots at London's Heathrow Airport. If Apollo is in this for a quick buck, the options are plentiful.
One can see why the easyJet board was impressed by Apollo's bid. The private equity giant offered the airline pound sterling7.15 ($9.70) per share, an 81% premium compared to easyJet's closing share price of pound sterling3.94 ($5.30) on May 28, the last business day before Castlelake's takeover attempt became public. That would yield a profit of pound sterling3.21 ($4.40) per share, although shareholders have also been given the option to roll over their stock into the new financial structure (whatever that might be). In making its offer, Apollo said that easyJet's strong brand and budget offering would not be changed, although its fleet will be "upgauged," a development that rival low-cost carriers like Ryanair and Jet2 will follow with interest. Apollo also wants to scale the airline's booming holidays business into a "structurally differentiated earnings stream"--although again, it's not clear what, if any, changes that will bring for customers.
Some analysts have speculated that Apollo will use EU proxy operations to satisfy ownership rules while effectively gaining economic control of easyJet, emulating the setup at International Airlines Group (IAG). A Spanish-registered company based in London, IAG owns British Airways, Spanish carriers Iberia and Vueling, and Ireland's Aer Lingus. It lists shares on the London and Madrid stock exchanges, with Qatar Airways holding the largest stake at 25.1%. Though IAG's subsidiary entities preserve their brand identities and accountability to local management, the group's directors are "responsible for managing and allocating capital, driving overall Group performance and setting the agenda for sustainability and innovation."
Within Europe, strict competition regulations are the biggest hurdle to airline takeovers, as IAG discovered a few years ago. In 2019, it announced plans to acquire the Spanish carrier Air Europa for Euros1 billion ($1.2 billion), initially planning to incorporate it into Iberia while retaining the former airline's unique branding. The EU objected on the basis of reduced competition, not only on domestic and European routes, but also on those connecting Spain with the Middle East, as well as North and South America. IAG dropped its bid in 2024, having decided that the extra requirements to appease the EU Commission made the deal financially unviable. (More recently, Spain's Socialist prime minister Pedro Sanchez was cleared in a conflict-of-interest case related to Air Europa's Euros475 million--$555 million--state bailout in 2020.)
Perhaps the most crucial part of the Apollo takeover will only begin if the EU determines that further ownership and control conditions have to be met. But whatever Brussels decides, this case is already testing limits in Europe's intensely competitive budget airline industry. If the deal goes through, Apollo will have set new limits.
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Mark Nayler is a freelance journalist and critic based in Malaga, Spain. He writes regularly for The Spectator and Times Literary Supplement and is working on a biography of the philosopher Bryan Magee, due to be published by Bloomsbury (London) in 2028.
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Original text here: https://fee.org/articles/a-hostile-takeover/
