EasyJet has rejected a higher £4.93 billion approach from Castlelake but has extended the offer deadline to allow its US suitor more time to come up with a “more attractive proposal”.

The low cost carrier said Castlelake had submitted a fourth approach on Tuesday worth £6.50 a share. EasyJet said: “Having carefully reviewed it with its advisers, the board of easyJet continues to regard the fourth proposal as substantially undervaluing the company and its prospects and continuing to give rise to significant questions of deliverability.

“Accordingly, the board of easyJet has unanimously rejected the fourth proposal.

“However, the board believes that giving Castlelake access to limited commercial information, as Castlelake sought in the letter which contained the fourth proposal, might produce a more attractive proposal that better reflects the value of easyJet and its prospects and the interests of shareholders thereto.”

EasyJet added it “continues to be concerned about the ownership structure and deliverability of any offer from Castlelake”.

Earlier this week the budget carrier rejected another offer from Castlelake worth £4.74bn,accusing it of trying to buy the airline “on the cheap”.

Castlelake said it had made three further takeover approaches to the airline this month, all of which had been rejected.

The airline’s share price has risen by 40% over the past month amid prospects of a takeover. Shares were up 3.4% at 521p by early afternoon on Monday, making easyJet one of the top risers on the FTSE 250.

Founded by British‑Cypriot entrepreneur Stelios ⁠Haji‑Ioannou in 1995 EasyJet is one of Europe’s leading airlines. Last year they carried more than 90 million passengers with the airline operating across 38 countries on more than 1,200 routes.

EasyJet, which is headquartered in Luton, England, employs more than 16,000 people across the globe.

Castlelake, who already own a stake of about 2.14% in EasyJet through the funds it manages, previously bailed out collapsed Scandinavian Airlines before selling its shares to Air France-KLM.

Air passengers taking advantage of Jet2’s famously low prices will see the availability of seats on the budget carrier’s flights fall in the coming months, after the travel giant received worse than expected earnings figures.

Around 200,000 seats are set to be withdrawn from sale in the coming months, with 5.6 million available during the winter season. While this would still represent a nine per cent jump in holidays from last year, Jet2 decided to cutback on its expansion following forecasts that the business’ takings would be lower than previously predicted.

This caused a steep drop in the firm’s stock price on Thursday, after analysis indicated that earnings for the year up to March 2026 would be around £449m, up from £446.5m the year before. Share values fell around 13 per cent in the figures’ aftermath.

Jet2 said bargain-hunting flyers were increasingly presenting a “later booking profile”, picking up flights at the last minute and giving the firm “limited visibility” over traveller numbers in the winter period where many of its seats are “still to sell.”

The budget travel firm saw package holiday booking rise 2 per cent over the summer, which ThisIsMoney details as a fall in the eight per cent boom it saw last year. However, these figures also reveal the changing habits of the flying public, with a large 17 per cent increase in flight-only bookings.

Jet2 CEO Steve Heapy told shareholders that the troubling figures were a result of “operating in a difficult market,” but that their growing customer base would “provide the foundation for a solid financial result this year and for further profitable growth in the years to come.”

The low-cost carrier, which held its annual general meeting on Thursday, added that it had implemented a “modest increase” in package holiday prices this summer and that it would be too soon to publish “definitive” figures on the business’ overall profitability.

Last month, Jet2 became the first airline in Britain to offer free plane tickets to some travellers, in the hopes of making their service more accessible for more customers. Now, all families travelling with a child under the age of two will not have to buy a ticket for their tot, whether as part of a package holiday or a single flight.

Russ Mould, investment director at AJ Bell, told ThisIsMoney: “Millions of people prioritise experiences over material goods, with foreign holidays high up the list of things they scrimp and save for. Such a trend should be positive for airlines and holiday companies, yet countless individuals are leaving it to the last minute to make a booking.

“Jet2 has once again bemoaned this situation, leaving it with cloudy rather than crystal clear earnings visibility. Management cannot keep their fingers crossed that sales will eventually come through; they need certainty given the expense in running a fleet of aircraft and a complex accommodation chain.

“Guidance that full-year earnings will be at the lower end of market forecasts has wiped out Jet2’s share price gains so far this year. It’s a disappointing setback for the business and has dragged down shares in other airlines including EasyJet and Wizz Air.”