The feuding at Easyjet has been kicked upstairs this afternoon, after Sir Stelios Haji-Ioannou claimed he would take all of the airline’s directors to court if any shareholder value is lost as a result of the board’s decision to by 135 new Airbus planes.
In an open letter, Stelios said: ‘I am not against replacing aircraft that have reached the end of their economic life. However I am against buying aircraft that are three times more expensive than the ones I bought with my own money in the early 2000s. Nor am I against directors trying to engineer some top line growth – but not at the expense of the profit margin.’
The row originally came about because a set of deals with Airbus tabled by the directors would commit the firm for nine years. Stelios says: ‘In the airline industry, nine years is a lifetime.’ He said that he feels public company directors should be legally held to account for what they decided to do, and insists he will do just that if the plans to ‘overcommit’ the company damage the share price or future dividends.
So why is he kicking up so much of a fuss? The Monaco-based multi-millionaire wants that profits diverted into investors’ pockets as dividends, but he also says his demands aren’t entirely self-serving. Apparently he thinks it’s just too risky to pursue aggressive growth in the current economic climate.
But pundits argue that Stelios has become obsessed with staying in the media limelight, and that his increasingly regular outbursts are a ploy to attract column inches. Back in January, for example, he threatened to sell his family’s entire Easyjet shareholding if the board bought a single new aircraft. Big talk, and ultimately nothing came of it.
In the most recent boardroom spat, at the firm’s annual meeting in February, a vote was cast on whether to push on with Easyjet’s expansion plans, re-elect Sir Michael Rake as chairman (he was effectively ousted), and to sign off on a new remuneration report that will allow chief executive Carolyn McCall (on £2m a year - a salary that Stelios has branded ‘unjustifiable’) to cash in £3m-worth of shares from July. The board was in favour of it all, but Stelios, predictably, was not.
Expect the fight to continue. The company is still profitable, but Stelios is not going to let go of his family’s 37% share any time soon, you can be sure of that. And as long as he has such a big stake, he’ll cause as much trouble as he can.