Stelios Haji-Ioannou’s dispute with easyJet, the airline he founded, is a “distraction” and “not helpful” in the current crisis, says the carrier’s chief executive Johan Lundgren.
Lundgren spoke in detail about the carrier’s aircraft order with Airbus, which is at the core of the dispute, in a trading update and half-year results on Thursday.
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He noted the agreement with Airbus last week to defer delivery of 24 aircraft this year and in 2021 and 2022 and noted this, together with the deferral or cancellation of other projects, had reduced the carrier’s projected capital expenditure “by about £1 billion over three years”.
Sir Stelios, who remains easyJet’s largest shareholder, has been sharply critical of an order for 107 aircraft he estimates will cost £4.5 billion.
After easyJet sought to defuse the row by deferring delivery of the 24 aircraft, Sir Stelios accused the carrier of “kicking the can down the road” and “not telling investors how many aircraft easyJet will go ahead and pay for”.
He insists the order should be cancelled.
Sir Stelios raised the stakes again this week by making a complaint to the UK Financial Conduct Authority (FCA) claiming easyJet had left the financial impact of deferring the deliveries “entirely unexplained”.
He also threatened to seek a High Court injunction if the FCA does not force a shareholder vote on the aircraft order.
Asked about Haji-Ioannou’s opposition, Lundgren said: “It’s not helpful. It’s a distraction, but we are focused on managing the airline through these times.
“This is the worst crisis aviation has seen. I’m immensely proud of how the team has responded.”
In a trading update, easyJet noted: “EasyJet has no ability to terminate the contract [with Airbus] by reason of force majeure.”
It also pointed out terminating the agreement would add “significantly” to the cost of technical support for the existing fleet and would be leave easyJet “liable for significant compensation related to discounts received on 45 aircraft we have had delivered”.
The carrier insisted: “The fleet has the potential to be substantially lower than our previous plan, while retaining the flexibility to respond to future demand environments.”