It seems that barely a day goes by without easyJet founder and majority shareholder Sir Stelios Haji-Ioannou kicking off about something. Since the corona-crisis began, Sir Stelios has been calling ever louder for the cancelation of easyJet’s Airbus order, even threatening to remove non-executive directors over the issue. Today, it seems he’s going right to the top, calling for the removal of Johan Lundgren, the airline’s CEO, from his post.
Removal of the ‘scoundrels’
It’s the latest installment in the long-running soap opera that is easyJet these days. Having demanded the cancelation of its Airbus order, founder and principal shareholder Stelios Haji-Ioannou, hasn’t been quiet for long. Initially calling for the sacking of Andreas Bierwirth, Sir Stelios then moved on to Andrew Findlay, the company’s Chief Financial Officer.
Now, it seems directors are no longer enough for the angry Greek-Cypriot, as he is now hungry for the blood of the airline’s CEO, Johan Lundgren. He is also seeking to oust Chairman John Barton over allegations that he failed to investigate easyJet’s deal with Airbus adequately.
As reported by This Is Money today, the tycoon accused the firm of acting like ‘scoundrels’ over the £1.5 bn ($1.9 bn) order placed with Airbus for 24 new planes. He told the outlet,
“I have previously referred those in charge of easyJet as scoundrels. This remains my view.”
He goes on to accuse Lundgren of running an ‘aircraft parking lot,’ and again alludes to the outcome of the Airbus bribery case and its relevance to easyJet. He continued,
“What the scoundrels are not telling us at all is how much money the company will burn each week after the resumption of flying, which will be well in excess of the £40 million per week that they state that they burn whilst the fleet is grounded.”
Flying half-empty planes
easyJet was granted a reprieve with a £600m ($740m) loan from the UK government earlier this month. With its entire fleet grounded until at least June, the airline is reported to be burning through £40m in cash (about $50m) a week. With no income, this was going to be a road to ruin, but the government bailout has secured its future temporarily, at least.
But Stelios isn’t to see the bright side. What seems to have inflamed the issue today is the announcement that the airline will block out the middle seat, in a bid to provide social distancing when it does resume service. It is a plan based on building confidence with customers and providing a safe environment. However, the founder isn’t happy about the empty seats.
“Flying half empty planes will be heavily loss-making. That £40 million per week of cash burn is before the payments to Airbus … UK taxpayers should be really worried now that they will not see any of their money back in March 2021,” he said.
Although easyJet agreed to defer the Airbus orders, given the current situation, it has, for now, ruled out canceling it altogether. This has inflamed Sir Stelios even more, with the social distancing issue proving to be the icing on the cake. He continued,
“Any attempt to operate a fleet of more than 250 aircraft (down from 337 now) is bound to just burn a shed load of cash in 2021. I hope the remaining scoundrels will follow that fleet plan and cancel the order for new useless Airbus aircraft that will lose a lot of money.”
Stelios has other reasons to be angry, too; the values of his shares have fallen £1.2bn ($1.5bn) in just a month. Before the full extent of the coronavirus crisis bit, easyJet shares were worth 1,508p. Today, they are worth just 616p. Anyone would be a little ticked off.
Should easyJet cancel the Airbus order? Let us know in the comments.