EasyJet founder Stelios Haji-Ioannou wants the carrier’s £4.5 billion contract with Airbus for more than 100 new aircraft cancelled, warning the airline otherwise risks running out of money by August.
In an extraordinary intervention late last week, crystallised in a statement issued on Monday (6 April), Stelios – whose family owns 34% of easyJet – confirmed he was seeking to remove two high-ranking members of the airline’s board.
On Friday (3 April), Stelios used his shareholding to “requisition” a general meeting to remove non-executive director Andreas Bierwirth after a previous attempt to oust the former Germanwings and Austrian Airlines chief, both now part of Lufthansa, was blocked by easyJet non-executive chairman John Barton.
Stelios said he would now up the ante and seek to dismiss a second member of the easyJet board, chief finance officer Andrew Findlay. He has also threatened to withhold any further investment in easyJet unless the Airbus contract, for what he described as 107 “useless” aircraft, is torn-up.
“If this £4.5 billion liability to Airbus is preserved – and not cancelled – by the easyJet board then, I regret to report, easyJet will run out of money around August 2020, perhaps even earlier,” said Stelios in a statement, citing a forecast published by easyJet’s house stockbroker.
“If easyJet terminates the Airbus contract, then it does not need loans from the UK taxpayer and it has the best chance to survive and thrive in the future with some injection of additional equity provided for by the markets,” Stelios continued.
“But if easyJet stumbles along while taking UK taxpayers money as loans only to pass it on to Airbus, it will have to raise fresh equity anyway in the next three to six months – reducing the value of our current shareholdings to close to zero.
“In any event, no rational investor would be buying new shares in easyJet if the money will be used to pay £4.5 billion to Airbus for new planes it simply does not need. I will certainly not be throwing good money after bad. For the avoidance of doubt, I will not inject any fresh equity in easyJet while the Airbus liability is in place.”
Stelios added easyJet needed to plan to reduce its fleet from 350 to 250 as it “will not need any more additional planes for many years to come”, noting also how the carrier already had one of the sector’s youngest fleets.
An easyJet spokesperson told TTG: “The board is managing the unprecedented challenges facing the airline and the aviation sector as a whole.
“We remain absolutely focused on short term liquidity, removing expenditure from the business alongside safeguarding jobs and ensuring the long-term future of the airline.
“We believe that holding a general meeting would be an unhelpful distraction from tackling the many immediate issues our business faces.”