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News & Advice

EasyJet founder steps up attack on airline

EasyJet founder Sir Stelios Haji-Ioannou stepped up his attack on the budget airline today as he threatened to withdraw the rights to the "easy" brand in a row over punctuality.

Sir Stelios - who quit the board in May in a row over strategy but owns the "easy" brand - said in a letter to chairman Mike Rake that the airline's reputation was "being eroded in a matter of months" due to delays and cancellations.

New chief executive Carolyn McCall said the temporary action to resolve "crewing issues" would lift costs by up to 3% during the current financial year.

The firm, which had a worse punctuality record than Air Zimbabwe at Gatwick in June, has also blamed air traffic control strikes in France for its recent problems.

But Sir Stelios said the "real reason" for the punctuality issues were "operational problems".

He hit out at former chief executive Andy Harrison for slashing costs over the winter - leaving the firm with too few staff to cover its schedule.

"He could have prevented this mess by admitting his mistake and only selling a summer schedule in terms of number of flights per day which was in line with the number of crew available and not the 10% year on year growth rates in passengers he was advertising to the City in order to justify his bonuses," Sir Stelios claimed.

The entrepreneur is engaged in a long-running dispute with the easyJet board over its growth plans. The founder - whose family owns a combined 38% stake - wants the firm to stop buying aircraft and begin dividend payouts.

He added: "Rest assured that if the necessary steps are not taken to improve the performance to an acceptable level such that the goodwill and reputation of the easyJet brand can start to be rebuilt, I will not hesitate to terminate the licence."

EasyJet has just finished a court battle with Sir Stelios over the use of the licence for non-airline products such as car hire. It believes he has no right to terminate the agreement on punctuality grounds.

The firm acknowledged the crew issues but added that almost two-thirds of its planes travel through French airspace, where controllers have been prioritising long-haul flights and aircraft taking off and landing in France during industrial action.

Despite the disruption and a £65 million hit from Iceland's volcanic ash cloud, easyJet still expects to make pre-tax profits of between £100 million and £150 million for the full year.

Total revenues were up 5.3% to £759.2 million over the three-month period, which saw rival British Airways hit by strikes in its long-running dispute with trade union Unite.