Monday 27 April 2020 2:30 pm

Easyjet board set for showdown with founder over Airbus contract

Easyjet’s board has set the date for a showdown with founder Sir Stelios Haji-Ioannou, who has been calling for the airline to scrap a £4.5bn order with Airbus.

On May 22, shareholders will vote on whether to back the board’s plan to go through with the deal, which has been modified in light of the coronavirus shutdown.

Haji-Ioannou has repeatedly argued that sticking with the deal will destroy the firm’s finances, and has also tabled votes for the removal of board members including chief executive Johan Lundgren and chairman John Barton.

However, Easyjet have said that through bolstering its finances through the government’s corporate financing schemes and deferring the delivery of 24 of the order’s planes, it has enough cash to survive a nine-month grounding.

In a release detailing the date of the meeting, the budget carrier said it had reduced its spending plans to £350m for the rest of this year, £600m for 2021 and £1bn in 2022. 

In a statement, the board said: “The board of Easyjet firmly believes that holding a general meeting is an unnecessary distraction at a time when the airline industry is facing unprecedented challenge. 

“The resolutions to remove the directors are an attempt to force Easyjet to terminate its Airbus contract. This is not in the best interests of the company or its shareholders as a whole”.

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The airline said that the Airbus contract had delivered 640 per cent in shareholder returns since it was agreed in 2008.  

“Having already taken decisive and urgent action to bolster EasyJet’s liquidity for a prolonged grounding, the board remains focused on successfully guiding Easyjet through this continued period of uncertainty”, it added.

In response to the announcement, Haji-Ioannou said: “I wish to congratulate the scoundrels on getting a second job. The official circular that defends their current positions and keeps the Airbus scandal in place, makes them sound just like an Airbus chief marketing officer. 

“I hope the second job pays better than the first because they will be losing that one pretty soon.

“The scoundrels have not said how they can save easyJet from bankruptcy and keep paying Airbus. Cancelling the Airbus contract is the only chance we have to save Easyjet.”

To win the votes, Haji-Ioannou’s resolutions need backing from over 50% of the shares voted.