EasyJet finance chief under pressure from City to bail out

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The Independent Online

Chris Walton, easyJet's finance director, is under pressure to step down after the low-cost airline stunned the City last week with its second profits warning in a month.

Chris Walton, easyJet's finance director, is under pressure to step down after the low-cost airline stunned the City last week with its second profits warning in a month.

Institutional shareholders have raised the issue with easyJet's non-executive directors, including its chairman, Sir Colin Chandler, in recent days. They believe that Mr Walton should take the rap for the abrupt way easyJet announced its gloomy outlook to the City.

Shares in easyJet have almost halved in value since the beginning of May as the company has warned of competition in the low-cost sector and rising fuel prices.

One fund manager said: "The finance director is on top of the numbers, but part of his role is to maintain good communications with the City. On this point, easyJet needs to get its act together."

Another said: "EasyJet has cocked up. They totally mishandled expectations in the market. Someone needs to take the rap." Both asked not to be named.

Shareholders are particularly aggrieved that Mr Walton was not available on Monday to explain the latest profits warning.

EasyJet's biggest shareholder is Stelios Haji-Ioannou who, with his family, controls 41 per cent of the company. He, too, is critical of the way easyJet handled its profits warnings. "There is room for improvement," he said. Asked if he had spoken to non-executive directors about the removal of Mr Walton, Mr Haji-Ioannou said: "I would not like to be drawn on detailed discussions. I am an insider. I have an appointee on the board. I speak regularly to board members."

Sir Colin contacted the company's main institutional investors on Friday in an attempt to smooth relations. The chairman admitted that easyJet had made mistakes in communicating with the City. "We should have erred on the side of pessimism at the interim results. I accept that. We are learning the lesson," said Sir Colin.

"I have complete confidence in Chris Walton," he added. And when asked if the non-executive directors were contemplating any changes to easyJet's board, he said: "Not at the moment."

Sir Colin attempted to draw a line under easyJet's recent run of poor form. "We won't go any lower than the last statement we made [on Monday]. But it is difficult to know how long the difficult market will last as there are a bunch of would-be Stelioses out there."

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