EasyJet founder Stelios demands that airline cancels £4.5bn Airbus order
Stelios Haji-Ioannou, easyJet’s founder and biggest shareholder, has intensified his battle with the airline’s management over a huge aircraft order with Airbus which he says it should cancel.
Haji-Ioannou said in a statement that he had told the airline he would not provide it with any new equity until it terminated a £4.5bn deal with Airbus. He said he had tried to change the company’s stance by calling for the removal of two of its directors.
Stelios, as he is better known, said that the 107 planes on order were “useless”, after the coronavirus pandemic brought air travel to an almost standstill.
The huge bill for the planes put easyJet’s survival at stake, he said.
Airlines across the world are struggling to say afloat. Whole fleets are grounded, including easyJet’s 344 planes, due to travel restrictions and plunging demand over fears of contagion.
Separately, easyJet provided an update on its financial position on Monday.
It said a £600m issue of commercial paper through the British government’s Covid corporate finance facility, and a request to draw down on its revolving credit facility meant it would have access to cash reserves of £2.3bn by April 9.
“Given the possibility of a prolonged grounding easyJet will continue to consider further liquidity and funding options,” the company said.
Stelios said easyJet would run out of money by August and he would not help it financially until the Airbus order was cancelled. He said he wanted easyJet to reduce its fleet size to 250.
Britain has told its airlines to raise new money from shareholders before it would consider helping them. While easyJet is taking advantage of government help schemes for businesses, it has not requested any specific state bailout.
Under UK company rules, Stelios’s only way of influencing management’s behaviour is to call for a shareholder meeting to vote for the removal of directors. He plans to write to easyJet’s chair to call for two directors to be removed, adding CFO Andrew Findlay to an earlier call for the removal of Andreas Bierwirth.
When asked about Stelios’s plans, the airline said that it believed holding a general meeting would be an unhelpful distraction at this time.
The Luton-based budget airline on Friday rejected Stelios’s first call for a general meeting to remove Bierwirth on what
Stelios’s team called a technicality, but a meeting, held electronically, would have to go ahead at some point, his spokesperson said.
“I fully expect easyJet to follow the stipulations of the Companies Act 2006 and to call a meeting within a three-week period,” said a spokesperson for Haji-Ioannou.
The Haji-Ioannou family owns about a third of easyJet’s shares and Stelios has been a long-time critic of the airline’s expansion plans.
EasyJet said in its statement it had agreed a deal with a union to furlough its pilots under the government’s job retention scheme. It agreed a deal with cabin crew last week.