EasyJet’s largest shareholder, Haji-Ioannou, has repeatedly asked easyJet to cancel orders for new planes, with coronavirus blockages likely canceling months of revenue.
He called a shareholders’ meeting to remove two of the directors of easyJet if the airline does not cancel the orders to reduce its £ 4.5 billion in planned spending until 2023.
EasyJet confirmed on Thursday that the meeting will be held on May 7, and has announced that it will delay the delivery of 10 planes this year, 12 next year and two in 2022.
The airline could also postpone five more aircraft orders in 2022 if demand does not pick up, and it has the option to delay or cancel another 24 operating leases that are to be renewed in the next 16 months.
Johan Lundgren, managing director of easyJet, said the airlines were facing “unprecedented challenges that require unprecedented action” as he revealed the deal to reduce orders.
EasyJet immobilized its entire fleet for at least two months, put thousands of employees on leave, and received £ 600 million in government supported loans to help it get through the lockout.
Responding to the news that easyJet had agreed to delay delivery of Airbus planes, Haji-Ioannou said: “A delay is like kicking the box. In addition, they do not tell investors how many Airbus EasyJet planes will go ahead and pay Airbus and how many will fly by plane over the next six months using British taxpayer money. “
He said he would write to regulators at the Financial Conduct Authority to try to force easyJet to disclose details of what had been agreed with Airbus.
Lundgren said, “We remain fully focused on improving short-term liquidity and reducing expenses across the company.”
Order delays would provide “a significant increase in our cash flow and a significant reduction in our short term [capital expenditure] program “.
Airbus has cut its production of planes to keep up with declining demand, while airlines try to save money for months without revenue. The aircraft manufacturer typically produces more than 60 of its best-selling Airbus A320s each month on assembly lines in Toulouse and Hamburg, but said it would reduce that number to 40.