EasyJet boss stands down in fall-out from Stelios row
Andy Harrison is the third executive to quit after last year's battles with founder
Thursday 10 December 2009
EasyJet's chief executive, Andy Harrison, is stepping down, becoming the third senior executive to leave the budget airline after high-profile battles with its original founder, Sir Stelios Haji-Ioannou.
Mr Harrison's departure, after four years in the job, follows the resignation of Sir Colin Chandler, the chairman, in April, and that of Jeff Carr, the finance director, in May.
EasyJet has been rocked by public rows since the autumn of last year when Sir Stelios – who owns more than a quarter of the company's stock – called for a more cautious growth strategy as the airline industry plummeted and recession hit the global economy. The carrier is set to expand its fleet by 50 per cent with the delivery of 109 Airbus aircraft by 2012. Sir Stelios said repeatedly that Mr Harrison should be reining back growth plans, and cutting back orders for new planes, in order to conserve cash and avoid tricky debt financing markets. But the management says cancelling orders will result in high penalties, although there may be some possibility for deferral.
The spat reached a peak last November when Sir Stelios queried the accounting treatment of aircraft for sale and threatened to refuse to sign off the company's accounts. By July there appeared to have been a rapprochement between the two warring sides. The board published plans targeting 10 per cent growth in 2009 and around 6 per cent over the next two years, in order to meet a three-year target of around 7.5 per cent – some way below the average growth rate nearer 15 per cent that EasyJet has seen in recent years.
But the damage was already done. When Sir Colin resigned in the spring, sources claimed he was "fed up" with the conflict with Sir Stelios. And yesterday easyJet revealed that when Mr Carr resigned in May, the terms of Mr Harrison's contract were altered to ensure he remained in place until at least the first quarter of 2010.
Mr Harrison said yesterday: "I have loved being a part of easyJet's success but am now looking forward to moving on to a new challenge."
He will remain in the chief executive role until June next year, and will be involved in finding his successor. But given the very public tumult over the past year, the search may prove a difficult task.
"Disputes leave a sour taste and this one has clearly been so bad that all the board members who were involved have chosen to resign," Gert Zonneveld, at Panmure Gordon, said. "There is clearly the suggestion that these people left because of a lack of independence that meant they were not able to do their jobs properly. Shareholders will insist the chief executive of the company be strong enough to stand up against Stelios, but how can you sell this job like that now?"
On the news of Mr Harrison's departure, easyJet's share price dropped by nearly 5 per cent in early trading.
EasyJet confirmed yesterday that Sir Michael Rake, the chairman of BT, will take over as chairman of the company from January. Sir Michael joined the board as a non-executive director in the summer. He will take over from Sir David Michels, who has been acting as chairman since Sir Colin stepped down.
Sir Michael said: "Andy Harrison has done a great job over the past four years and under his leadership, easyJet has developed into a truly pan-European airline operating Europe's leading air transport network."
Sir David, who will stay on at easyJet as an senior independent director once he steps down as acting chairman, said: "We thank Andy for his considerable contribution during this period and his leadership of the company over the last four years."
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