EasyJet handed shareholders a 20 per cent hike in the dividend yesterday and splashed out on another big plane order to catch up with rival Ryanair and turn more of Europe’s airspace orange.
But the move still sparked a word storm from Sir Stelios Haji-Ioannou, founder and, with family members, a 35 per cent shareholder in the airline.
After EasyJet, headed by chief executive Carolyn McCall, said it was buying 27 more Airbus A320s over the next four years, a spokesman for Sir Stelios said: “We’re keeping a very, very close eye on this and will hold the directors to account by all legal methods. This will be destructive of shareholder value.”
The order will cost $2.5bn (£1.5bn) at list price, although EasyJet said it had secured a “very substantial discount”.
The deal, which comes on top of the 100 A320 neo jets that the company ordered last year, will take EasyJet’s fleet up from 226 planes now to 304 by 2019.
Previous aircraft orders have seen Sir Stelios sell hundreds of thousands of shares in protest.
The airline currently has a 22 per cent share of capacity at its top 20 European airports – or around 46 million seats – but reckons it has the chance to grow that to 41 per cent, or 86 million seats.
Yet even the higher dividend – EasyJet said it would pay shareholders 40 per cent of post-tax profits for the year ending in September, rather than the 33 per cent paid previously – didn’t placate Sir Stelios. Instead, his spokesman said that was as it should be.
“This is what we’ve been banging the drum for over the past six years: shareholders deserve a bigger payout of the returns EasyJet makes,” he said. “The airline is now a mature, cash-generating company, and investors deserve everything they get.”
In July, the company said that pre-tax profits this year were expected to rise by as much as 19 per cent to between £545m and £570m.
Its shares rose 19.50p, or 1.46 per cent, to 1,357.50p.
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