Sir Stelios may return as easyJet chairman in row over strategy
Saturday 15 November 2008
The founder of easyGroup, Sir Stelios Haji-Ioannou, yesterday threatened to reinstall himself as chairman of easyJet during a row about the airline's growth strategy.
Sir Stelios, a non-executive director of easyJet, expressed his intentions in a letter to the airline's management on Thursday after a board meeting.
He wants the company to pay dividends for the first time and is unhappy that it is embarking on capital projects amid falling consumer demand and rising running costs. Over the next three years, easyJet is set to expand its fleet by 35 aircraft and has committed to buying 80 planes, which analysts estimate will cost it £2.4bn.
Gert Zonneveld, an airline analyst at Panmure Gordon, criticised Sir Stelios's actions and said the expansion plans were justified, given budget pan-European carriers were likely to dominate during an economic slowdown.
EasyJet uses the 'easy' name under licence from easyGroup. Sir Stelios, who was chairman until November 2002, told easyJet on Thursday night that his sister had transferred her 11 per cent interest in the airline to him, giving him a shareholding of nearly 27 per cent and the power to name two new non-executives to the board. If they are not appointed, he has reserved the right to install himself as chairman.
EasyJet also confirmed it had been in talks about a bid for Gatwick airport, which competition authorities are forcing BAA to sell. But easyJet denied that it was about to launch a £2.5bn bid with Virgin Atlantic for the airport, stressing that its role in any bid would be limited to "giving its blessing" to a firm proposal. Virgin Atlantic confirmed it had been in talks over a bid for Gatwick but emphasised that banks would be asked to stump up much of the money should a firm proposal materialise.
Mr Zonneveld said it was unlikely that easyJet would contribute cash to a bid for Gatwick airport.
"EasyJet has a quarter of all the slots at Gatwick, so it is understandable that they would want to be involved in an approach for the airport. However, its role is likely to be restricted to guaranteeing a certain volume of passengers passing through the airport, rather than the actual financing."
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