EASY JET’S management hopes to put an end to its board-level dispute over expansion plans on Wednesday after bowing to shareholders’ calls to scale back expansion.
A truce will mean the end of an eight month long public tussle between founder and majority shareholder Stelios Haji-Ioannou and management over the no-frills airline’s plans to expand its fleet by 20 per cent over the next three years.
EasyJet is now expected to say on Wednesday at the company’s third quarter results that it will rein back the rate of its fleet expansion to between five and 10 per cent, a slowdown from the growth it has pioneered in recent years.
It is believed that the agreement will centre around exchanging older planes for new aircraft, with new deliveries postponed for at least 18 months.
Stelios had voiced concerns that rampant expansion during the downturn could wipe out shareholders’ payouts and that easyJet could struggle to fill the planes profitably , particularly if governments prove reluctant to let struggling competitors fail. Stelios ratcheted up the pressure further, threatening to exercise his rights to become the airline’s chairman again and place his representatives on the board.
But the battle has been viewed by other shareholders and analysts as a distraction to running the business, and it is hoped this new deal will put to bed anxieties about the business.