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EasyJet founder escalates spending row with challenge to board
EASYJET Plc's founder has called for a shareholder meeting to oust one of the discount airline's directors, following through on a threat to remove the board one-by-one in a dispute over a £4.5 billion (S$8 billion) aircraft order.
Stelios Haji-Ioannou, EasyJet's biggest owner with a 34 per cent stake, proposed a general meeting to remove director Andreas Bierwirth, according to a letter sent late on Wednesday to the airline's chairman, John Barton.
Mr Bierwirth, a former airline and telecommunications executive, has been a member of the board since 2014.
Mr Haji-Ioannou, who has long opposed buying new aircraft, this week turned up the heat on a low-simmering campaign to halt the purchase of more than 100 Airbus SE narrow-body jets.
The 53-year-old entrepreneur, emboldened by the Covid-19 crisis that's suddenly turned large spending commitments into a millstone, on Sunday demanded the deal for A320-family planes be terminated. He threatened to challenge one non-executive director every seven weeks, tying up the board with a series of cumbersome and divisive general meetings until it succumbs.
"The board is focused on managing the unprecedented challenges facing the airline and the aviation sector as a whole," it said in response to Mr Haji-Ioannau's letter. "We believe that holding a general meeting would be an unhelpful distraction from tackling the many immediate issues our business faces."
EasyJet is considering options including raising new debt and equity to provide a buffer against the downturn, which has forced the UK airline to ground its fleet.
It is exploring various fundraising scenarios, including commercial and government sources, as well as a delay in plane orders to conserve cash if needed for a longer-term downturn, sources said. The airline would prefer loans to selling new shares, a source said.
EasyJet, which is seen as one of the European airlines better-equipped because of its existing cash and credit lines, is discussing the best options to navigate the pandemic-related slowdown and traditionally slower winter season, the sources said.
Adding liquidity would fortify EasyJet as it digs in for an undetermined period with little revenue. While it's considering other ways to boost cash, including equity as an option would align with the UK government's preference for private solutions to the Covid-19 crisis. The International Air Transport Association this week warned that airlines will burn through as much as US$61 billion worldwide in the second quarter as travel hits bottom.
Mr Haji-Ioannou has also urged the company to raise £600 million in equity through a rights issue to existing shareholders.
He quit the board in 2010 in a dispute over growth, and has consistently objected to the airline's growth plans. BLOOMBERG