Stelios calls for rebellion as he quits board of easyJet
By Rob Davies for the Daily Mail
Updated: 16:33 EST, 14 May 2010
Sir Stelios Haji-Ioannou has sensationally resigned from the board of easyJet and is arming himself to spearhead a shareholder rebellion against the strategy of the low-cost airline he created.
Haji-Ioannou - who owns 26.3pc of easyJet through easy-Group holdings - launched a stinging attack this week on departing chief executive Andy Harrison.
He accused Harrison, who is leaving to head up hospitality group Whitbread, of 'squandering' £2.7bn on Airbus aircraft , while paying no dividends.
Feud: Haji-Ioannou is slating the decision to expand esayJet's Airbus fleet
And he has followed up the broadside by declaring war on the current board and their plans to expand the carrier's fleet of aircraft above the current stable of 190 planes.
'This huge expenditure is demonstrably failing to produce higher profits and therefore has created zero value for shareholders,' he said.
He pointed to a forecast by investment bank ABN Amro - made prior to the Airbus order - predicting a profit of £284m in 2009. Full-year earnings actually came in at £42.7m.
EasyJet founder Sir Stelios Haji-Ioannou quits the board in row over growth strategy
EasyJey share price (thisismoney.co.uk)
The colourful entrepreneur plans to call an emergency meeting in which he will ask shareholders to reject the 'expensive legacy of an order signed by Andy Harrison in November 2006, when entirely different economic circumstances prevailed'.
He said: 'I'm encouraged by the fact that I've spoken to other shareholders and I'm not alone in thinking that the company doesn't need to spend billions on more aircraft.'
He added that the group should also consider selling some of the fleet to keep it at the same size for up to four years, a strategy he said would reap higher profits.
'The time has come to change the strategy from the outside,' he said. 'UK boards have a chummy atmosphere where you're not supposed to be critical of the board.'
FLYING INTO A STORM
1 Dec 2005: Andy Harrison appointed chief executive
14 Nov 2006: easyJet signs a contract to expand its Airbus fleet
9 Dec 2009: Harrison steps down to become boss of Whitbread
23 Mar 2010: easyJet appoints Guardian Media Group boss Carolyn McCall as CEO
12 May 2010: Stelios says Harrison is 'overrated'
He claimed to have been subjected to a 'typical gagging order' on his objections to group strategy.
But a company statement said all decisions on capital expenditure and strategy had been signed off by the board, including Haji-Ioannou.
And sources familiar with the long-running feud between Haji-Ioannou and Harrison went further, claiming the Greek entrepreneur's decision was motivated by his own financial concerns.
The source said Haji-Ioannou was keen to pocket dividends on his holding in the company and also suggested he was positioning himself for a legal battle later this year over revenues derived from the easyJet brand name.
A second easyJet director, Robert Rothenberg, also resigned from the board.
Sir Stelios Haji-Ioannou calls for easyJet rebellion as he quits board