Sir Stelios plans to keep up the pressure on EasyJet's board after protest vote at annual general meeting

Rebecca Smith
EasyJet announced it was still feeling the pain from weak sterling in its latest  update
EasyJet announced it was still feeling the pain from weak sterling in its latest update (Source: Getty)

Sir Stelios Haji-Ioannou plans to keep up the pressure on EasyJet’s board after grilling them with a series of questions over a sale and leaseback deal at today’s annual general meeting (AGM).

The airline’s founder and now its biggest shareholder, put a raft of questions to directors over a sale and leaseback deal for 10 aircraft at the end of last year.

The EasyGroup chairman has been vocal in his opposition to the budget carrier’s plans to ramp up the size of its fleet and said last month he would be making a protest vote against the re-election of the firm’s chairman at the AGM.

Read more: Stelios announces EasyJet protest vote as shares slide

An EasyGroup spokesperson said Haji-Ioannou “will be looking to keep up the pressure on the board to address the fleet size” and capacity issue.

Among his questions put to EasyJet’s board today were the value of the deal for the airline and what “the real objective” was of the leaseback element to the transaction, rather than selling them on an outright basis.

EasyJet has said the aircraft involved are its “oldest owned aircraft”, with an average of 11 years and the tender process was “very competitive” though said terms of the agreement would remain “strictly confidential”.

The directors said the transaction’s purpose was to manage residual value risk and “create an exit route for our oldest, less-efficient owned aircraft”.

It agreed sale and leaseback arrangements for the A319 aircraft in question, generating $144m (£115m) in December last year.

Read more: Here's what City analysts made of EasyJet's update as shares nosedive

Speaking at the firm's AGM, EasyJet's chairman John Barton said:

"The board would like to thank our shareholders for their continued support. The board would also like to thank all of EasyJet's people who are central to the delivery of the airline's success.

"Through the continued delivery of EasyJet's successful strategy and our relentless focus on cost the airline is on track to deliver further long term sustainable profitable growth for shareholders."

Haji-Ioannou’s grilling came off the back of EasyJet’s first quarter update “and the share price slump that ensued”.

“Clearly other investors are extremely unimpressed by the decline in revenue per seat,” he said, after the airline’s update noted revenue per seat dropping 1.2 per cent to £51.64 per seat.

Shares fell over nine per cent after EasyJet said there’d be a bigger than anticipated hit from the weak pound last month. It does though, still plan to expand capacity by nine per cent over the financial year to 30 September.

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