EasyJet Founder Berates Company On Orders
July 13, 2011
EasyJet's largest shareholder, Stelios Haji-Ioannou, has resumed a dispute with the company he founded, saying the low-cost carrier should consult investors before signing any deal for new planes.
In an 11-page letter sent to chairman Michel Rake this week, Haji-Ioannou, who has a 26 percent stake and wants easyJet to cut its fleet, said the board should have sought shareholder approval for an aircraft order made earlier this year.
In January, easyJet confirmed an order with Airbus for 15 A320 aircraft. It also secured options on a further 33 jets, strengthening its relationship with the European manufacturer.
"This incestuous relationship with Airbus developed by the directors has to come to an end and proper and transparent tenders have to be issued giving the opportunity to other aircraft manufacturers to compete for the company's business," Haji-Ioannou said.
The carrier has a fleet of 186 aircraft -- 184 of which are Airbus planes -- and has orders for a further 43 Airbus planes, including the A320s.
Haji-Ioannou said shareholder consent for the latest Airbus order should be obtained before the company made any further payment. If the board did not seek shareholder consent, Haji-Ioannou said he would call a general meeting and seek "the removal of a randomly selected non-executive director from the board" in a show of shareholder power.
The tycoon's relationship with easyJet's board has deteriorated in recent years and he voted against a resolution to approve directors' pay earlier this year.
Earlier this year, easyJet chief executive Carolyn McCall said the orders would help deliver its growth strategy.
EasyJet said on Wednesday: "The commercial value of the deal reflected substantially less than the current Airbus list prices for the aircraft."
The carrier said it intended to hold the size of its fleet at a maximum of 204 aircraft until at least the end of next year.
In an 11-page letter sent to chairman Michel Rake this week, Haji-Ioannou, who has a 26 percent stake and wants easyJet to cut its fleet, said the board should have sought shareholder approval for an aircraft order made earlier this year.
In January, easyJet confirmed an order with Airbus for 15 A320 aircraft. It also secured options on a further 33 jets, strengthening its relationship with the European manufacturer.
"This incestuous relationship with Airbus developed by the directors has to come to an end and proper and transparent tenders have to be issued giving the opportunity to other aircraft manufacturers to compete for the company's business," Haji-Ioannou said.
The carrier has a fleet of 186 aircraft -- 184 of which are Airbus planes -- and has orders for a further 43 Airbus planes, including the A320s.
Haji-Ioannou said shareholder consent for the latest Airbus order should be obtained before the company made any further payment. If the board did not seek shareholder consent, Haji-Ioannou said he would call a general meeting and seek "the removal of a randomly selected non-executive director from the board" in a show of shareholder power.
The tycoon's relationship with easyJet's board has deteriorated in recent years and he voted against a resolution to approve directors' pay earlier this year.
Earlier this year, easyJet chief executive Carolyn McCall said the orders would help deliver its growth strategy.
EasyJet said on Wednesday: "The commercial value of the deal reflected substantially less than the current Airbus list prices for the aircraft."
The carrier said it intended to hold the size of its fleet at a maximum of 204 aircraft until at least the end of next year.
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