The founder of easyJet warned that the airline would run out of cash by August if an order for more than 100 new Airbus aircraft is not canceled.
Stelios Haji-Ioannou, who has no executive function but whose family controls a third of the carrier’s actions, seeks to remove the chief financial officer, Andrew Findlay.
An extraordinary open letter from the businessman begins: “My main goal is to terminate the £ 4.5 billion contract between easyJet and Airbus for 107 unnecessary extra planes.
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“If this £ 4.5 billion liability to Airbus is preserved – not canceled – by the easyJet board, I regret to report, easyJet will run out of money around August 2020, perhaps be even earlier. “
In response to the coronavirus pandemic and the collapse in passenger demand, the airline immobilized its entire fleet in April and May.
While many players in the aeronautical industry hope that large numbers of flights will resume by June, Sir Stelios believes that the resumption of mass air travel could be much longer: “Almost all European countries have now closed their borders to foreigners. No one really knows when they will reopen.
“Fear has now taken precedence over human behavior when it comes to any form of overseas travel.
“Each country will want to keep the others outside much longer than the date on which its own local national lockout ends.
“I think that easyJet at the end of the national blockages will look more like a start-up trying to find a few profitable routes for a few aircraft at a time.
“How many Britons will want to fly to northern Italy or Spain on vacation in June and vice versa? Not much, I think. “
Sir Stelios criticizes Credit Suisse forecast last week for what he says is an “assumption that easyJet will fly all of its current 330/350 aircraft at full capacity starting in October 2020 and make higher profits in 2021 than in 2019 ”.
He writes: “The termination of the Airbus contract is the only chance for current shareholders to maintain value in their shares.
“If easyJet terminates the Airbus contract, then it does not need loans from the UK taxpayer and has the best chance of surviving and thriving in the future. “
He is seeking the support of other shareholders to oust Mr. Findlay, as well as a non-executive director, Andreas Bierwirth, at an extraordinary general meeting.
An easyJet spokesperson said, “The board of directors is managing the unprecedented challenges facing the airline and the aviation industry as a whole.
“We remain absolutely focused on short-term liquidity, cutting corporate spending while preserving jobs and securing the long-term future of the airline.
“We think holding a general meeting would be an unnecessary distraction from tackling the many immediate problems our business faces.”
In the past four weeks, the easyJet share price has fallen by around half.