Sir Stelios Haji-Ioannu, who has been granted an emergency meeting of the easyJet shareholders has lost round one in his argument to cancel the airlines order with Airbus.
Lawyers have advised that the airline cannot claim “force majeure” as an excuse to cancel the contract. The company has not been faced with physical destruction outside of its control or compelled by government or war to cancel its contract.
If it was to cancel it’s order anyway, it would have to repay substantial discounts on the 45 aircraft it accepted under the 2013 contract, pay compensation to Airbus in respect of the undelivered aircraft and face greatly increased expenses in respect of repairs, maintenance, software and training which were negotiated in the contract.
Airbus has accepted deferments and easyJet has also published how it’s going to proceed.
EasyJet is asking it’s other shareholders to refrain from action. Sir Stelios owns 33.7% with his EasyGroup owning another 5%, by no means a majority. It seems unlikely other shareholders will want to rock the boat in such difficult times.