Strategy defended by easyJet chairman
19.05.10
easyJet's chairman Sir Michael Rake has defended the budget airline's strategy after the surprise resignation of its founder last Friday, promising investors the board would consider returning cash to shareholders. The news comes as the airlines second biggest shareholder backed the board.
Stelios Haji-Ioannou, the airline's founder, quit the board last Friday accusing it of pursuing the wrong strategy, pointing to a lack of share price progress over the last 10 years and the absence of a dividend, despite a £200m investment in planes during the period.
Sir Michael, in a letter to shareholders, said the board was ‘surprised and disappointed’ to find itself in dispute with Sir Stelios again, and said he considered there were no grounds for a it. He said the board kept the issue of returns to shareholders ‘under review’ adding: ‘Given the strong underlying performance this year, I believe the board could be in a position to consider the matter of some sort of return within a reasonable time frame.’
Stelios also criticised the airline's plans to increase it's fleet, but Sir Michael said easyJet's stated medium term growth rate of 7.5% in seats flown per year was approved unanimously by the board - of which Stelios was a member - last June. He added no further orders would be placed until the group's new chief executive and finance director join on July 1.
Separately Standard Life, easyJet's second-bigest shareholder after the Haji-Ioannou family, said that it supports the board's strategy, the Wall Street Journal reports. Standard Life owns a 9.45% stake whilst the Haji-Ioannou family own just over 38%.
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