EasyJet founder to vote against airline's plan to buy 135 new Airbus planes

Sir Stelios Haji-Ioannou says he will reject £8bn deal over easyJet's failure to disclose discount it secured from Airbus

EasyJet's founder and largest shareholder, Sir Stelios Haji-Ioannou, has said he will vote against the budget airline's plan to buy 135 new aircraft, at an investor meeting later this month.

The company revealed last month that it had agreed to buy 35 current generation A320 aircraft and 100 new generation A320neo aircraft from Airbus, for delivery between 2015 – 2022. It has options to buy a further 100 A320neo planes.

If the deal goes ahead, easyJet will use the new aircraft to replace ageing planes as they leave the fleet, and to facilitate growth.

Haji-Ioannou, who founded the airline in 1995 and owns a 37% stake with his family, said in an open letter to shareholders that he would reject the deal worth around $11.9bn (£8bn) at list prices at the meeting on 11 July.

The easyJet founder said he expected the majority of shareholders to approve the deal with Airbus despite his objectionsIn his latest clash with the easyJet board, he criticised its failure to disclose the level of discount secured from Airbus, describing it as a secret deal, and asking: "Would you eat in a restaurant where the menu has no prices?"

"As the person with the most to gain if this company increases profitability and the most to lose if the outcome from this order is not as promised by the board, it is my firm opinion that this is a good deal for Airbus and a bad deal for easyJet shareholders," he wrote.

He added: "I strongly believe public company directors should be legally held to account for their decisions. I will hold these directors to account, if at some point in the future it turns out that their decision to overcommit the company today was wrong."

Haji-Ioannou said his objections were partly based on a belief that the new order will lead to a hunt for new, unprofitable routes. He also claimed that costs per seat had increased by 25% over the past four years, arguing that if the trend continued, customers were unlikely to pay the "ever increasing ticket prices".

Despite his objections, Haji-Ioannou said he expected the majority of shareholders to approve the plan.

A spokesman for easyJet declined to comment.

Article Source : http://www.guardian.co.uk

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