Sir Stelios quits EasyJet board

Click to follow
The Independent Online

EasyJet founder Sir Stelios Haji-Ioannou quit the board of the low-cost airline today in a long-running battle over its growth strategy.

Sir Stelios, whose family members are major shareholders with a combined 38% stake, has been critical of the airline's plans to grow the size of its fleet, believing that profit margins and dividends should be a higher priority.



The entrepreneur said he may now call a special meeting of shareholders to consider rejection of the current strategy of "relentless growth".



The Luton-based carrier currently has 189 aircraft, with firm orders for 59 new planes by the end of September 2012.



Sir Stelios said the additional planes were an "expensive legacy" of an order signed by outgoing chief executive Andy Harrison and Airbus in 2006, when different economic circumstances prevailed.



He added: "The inescapable fact is that this airline used to make a bigger absolute profit using far fewer aircraft. The low-cost airline model is maturing, and management needs to now adopt different priorities to take the business forward.



"To date, easyJet management, supported by certain other board members, have refused to do this."



Sir Stelios, who founded the business in 1995, said he had been outvoted on the matter at board meetings over the last two years.



EasyJet said its fleet plan will enable the airline to grow its share of the European short-haul market from today's figure of around 7% to approximately 10%.



Chairman Sir Michael Rake said he was surprised at the resignation and added that easyJet was one of the best performing airlines during the recession with pre-tax profits of £44 million in 2009.



"EasyJet is well financed and has maintained a strong balance sheet," he said.

Comments