Boardroom battle at easyJet
15.11.08
A major row has broken out between easyJet founder Stelios Haji-Iannou and other directors at the budget airline over how it should cope with the current economic difficulties. Stephen Furlong, airlines analyst at stockbroker Davy, described it as ' open warfare.'
Sir Stelios, a non-executive director, has lifted his stake in the airline by about 11% to 26.9% and asked for the appointment of two new directors as he pushes for the airline to adopt a more cautious approach. He wants easyJet to reduce an order for new aircraft, amid falling consumer demand and rising operating costs, using funds to pay a dividend instead. He also threatened to reinstall himself as chairman of easyJet.
Over the next 3 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. Sir Colin Chandler, the airline’s current chairman, said he and the other non-executive directors fully support the airline’s executive management.
Sir Stelios expressed his intentions in a letter to the airline's management on Thursday after a board meeting. He revealled that his sister had transferred her 11% interest in the airline to him, giving him a shareholding of nearly 27% and the power to name two new non-executives to the board. [His brother holds another 13%].
If the directors are not appointed, Sir Stelios has reserved the right to install himself as chairman. He said in a statement: ‘I am merely applying my rights ... to protect my investment in easyJet.’
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