Sir Stelios fires first shots in easyJet battle

easyJet’s main shareholder Sir Stelios Haji-Ioannou has kept his promise to campaign to have a 107 aircraft order with Airbus scrapped.

His shareholding company, easyGroup, has called a meeting to remove Andreas Bierwirth as a non-executive director, in line with a threat to remove the airline’s directors one-by-one over the next seven weeks.

Sir Stelios, the airline’s original founder, is opposed to the US$4.5bn Airbus order, which he claims, puts the airline’s survival in question in the current environment.

A letter sent last week set out a list of demands, including cancelling the order through a ‘force majeure’ clause, and the appointment of an independent law firm to investigate whether bribery was involved in any of the contracts.

Easyjet has also been under fire more generally for paying out a £171m dividend just days before grounding its fleet and putting its staff under the umbrella of the UK government-funded furloughing scheme. However having consulted lawyers the airline was told it was obligated to pay the money.

Sir Stelios controls 34% of the airline’s shares and received £60m from that dividend distribution.

In the letter, he said the airline needs to raise cash through a right issue, not government loans:

If we don’t pay Airbus we don’t need government loans. It would be an abuse of taxpayers’ money to obtain loans to pay Airbus for an unprofitable investment in 107 aircraft. We should raise equity.

Sir Stelios is being extremely PR savvy, making sure that he seems to be the good guy – by not taking a government bailout, while happily taking the £60m dividend – you don’t see him offering to give it back!

He’s also being a little too clever by linking the possibility of the recent Airbus bribery scandal to easyJet’s board, giving them something to have to defend against even if its not true – easyJet were never implicated in wide ranging investigations.