**UPDATE: 03/30/2020 @ 13:42UTC – Added statement from airline**
easyJet founder Sir Stelios Haji-Ioannou has called for the airline to terminate all future Airbus deliveries. The move comes as the low-cost carrier has grounded all of its aircraft until June at the earliest.
The aviation industry is currently facing a challenge far greater than anything ever experienced before. Airlines are in panic mode, grounding aircraft and looking for ways to save cash as demand plummets.
easyJet has today grounded its entire fleet and has sent its staff to help the NHS, however, the airline’s founder Stelios Haji-Ioannou wants more extreme action. He has called for the airline to serve notice of termination to Airbus in a strongly worded letter to the non-executive directors of easyJet PLC.
What has Stelios said?
According to a letter from Stelios seen by ITV’s business and economics editor, Joel Hill, the easyJet founder has called for the airline to “serve notice on Airbus for cancellation of all future deliveries”.
“If we don’t pay Airbus we don’t need government loans”- Easyjet’s biggest shareholder has turned on the board. Sir Stelios tells chairman to cancel £4.5bn Airbus order for 107 aircraft or he will seek to remove 1 non-exec director every 7 weeks “starting with Andreas Bierwirth” pic.twitter.com/g3PgoQAeic
— Joel Hills (@ITVJoel) March 29, 2020
He went on to add that he believes it would take two to three years before any legal action from Airbus would receive a judgment, with an appeal taking even longer. Despite the threat of legal action, Stelios wrote that he would “rather spend shareholders’ scarce money paying lawyers to defend easyJet against a potential legal action by Airbus demanding dubious penalties rather than buying overpriced planes”.
According to Airbus’ latest published order book, as of the 29th of February easyJet has 108 aircraft outstanding. This consists of 19 A321neos and 89 A320neos. The airline has already received 34 A320neos, alongside 11 A321neo aircraft. Just last week, Simple Flying reported that easyJet’s Airbus order was the airline’s biggest threat.
It doesn’t seem as though Stelios is willing to take no for an answer in the case of his Airbus order demands. He added in his letter that, if his points aren’t addressed by 12:00 BST on the 1st of April (Wednesday), he will start action to remove one non-executive director every seven weeks. He even named the director that he would start with.
Simple Flying reached out to easyJet, who provided us with the following statement:
“easyJet’s board is completely focused on taking the right actions now to ensure the long-term future of the airline and safeguard jobs. We are removing cost and non-critical expenditure from the business at every level to help mitigate the impact from coronavirus, including today the grounding of our entire fleet of aircraft and working with suppliers to defer and reduce payments where possible including on aircraft expenditure.
“We fully appreciate the difficulty and uncertainty that our people are facing and we are doing everything we can to preserve their jobs. easyJet maintains a strong balance sheet, with no debt re-financing due until 2022 and we are in ongoing discussions with liquidity providers. These efforts will leave easyJet in the best position to resume flying once the pandemic is over.
“We will respond privately to the letter shortly.”
The announcement comes at a difficult time for the aviation industry. Airlines everywhere are looking to cut costs where they can. For many, including easyJet, this has meant grounding the majority of their fleets.
easyJet has grounded its fleet, for the time being, the other option being operating nearly empty flights. This is not good from an economical or environmental standpoint. As a result, the airline doesn’t expect to operate any more flights until June at the earliest. However, easyJet has asked its staff to help out the NHS, the UK’s national health service.
Do you think easyJet should bin its Airbus commitment? Let us know your thoughts in the comments.