Sir Stelios calls for change of direction at easyJet

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The Independent Online

Hopes at easyJet that a restoration of its dividend following the truce it agreed with founder Sir Stelios Haji-Ionnaou might encourage a more supportive public stance from its largest shareholder were dashed yesterday. The news that the budget airline made a £153m loss during the first half of the year was greeted with an attack by Sir Stelios, who accused it of operating a "lazy" balance sheet and called for a share buy-back programme.

Carolyn McCall, who joined easyJet as its chief executive last July, has won some support from Sir Stelios, who had been hugely critical of her predecessor's determination to increase the size of the airline's fleet rather than using cash to pay dividends.

Yesterday, however, Sir Stelios said the change of direction had not gone far enough. "The company's balance sheet is too lazy," he said of easyJet's £1.43bn cash holding. "I think shareholders would be better off if the board returned this surplus cash."

Europe's second-biggest low-cost carrier said it would pay its first dividend next year, despite a 93 per cent rise in losses for the six months to 31 March compared to a year ago. Higher fuel costs accounted for £43m of the losses and higher taxes for £21m, after air passenger duty rose to £12 for economy flights in November. Ms McCall said: "The past six months have been tough, with sharply rising fuel costs combined with cautious behaviour by consumers and an adverse impact from passenger taxes."

Other airlines, from easyJet's rival Flybe to International Airlines Group, have also laid bare the aviation industry's battle against rocketing oil prices.

To avoid a repeat of the "operational difficulties" of last summer, the company said it had increased crew numbers by 21 per cent, compared with a capacity increase of 11 per cent. This helped easyJet improve its on-time departures to an average of 81 per cent in the second quarter, up from 66 per cent in 2010.

James Cooke, an analyst at Panmure Gordon, said: "There is considerable uncertainty in terms of the macroeconomic environment."

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