By Callum Keown
EasyJet /zigman2/quotes/202825892/delayed UK:EZJ -8.23% founder Sir Stelios Haji-Ioannou has failed in his bid to oust the airline’s CEO and chairman over the carrier’s decision not to cancel a £4.5 billion Airbus /zigman2/quotes/208224336/delayed FR:AIR -6.57% order it “simply cannot afford.”
The airline’s largest shareholder had forced a crunch vote in an attempt to remove chief executive Johan Lundgren, chairman John Barton, chief financial officer Andrew Findlay and non-executive director Andreas Bierwirth.
The company said all four directors survived by around 58% to 42% in separate shareholder votes on Friday. The budget airline grounded its entire fleet in March due to the coronavirus pandemic but said this week some flights will resume from Jun.15.
Sir Stelios, who along with his family owns 34% of the company’s shares, has urged the company to cancel its 107-plane order placed with Airbus in 2013, which he said easyJet “simply cannot afford.” He said the airline, which grounded its entire fleet in March, would run out of money by August if it pressed ahead with the order.
He added that easyJet was set to send Airbus £1.5 billion in the next nine months while “running an aircraft parking lot.” The Greek-Cypriot billionaire also offered £5 million for a whistleblower to come forward to help scupper the Airbus deal.
EasyJet said it was unable to cancel the Airbus contract by reason of force majeure and added it would be liable for “significant compensation” to discounts received on the 45 planes it has received under the contract since 2013. It has also said the contract is vital to its future as it needs to replace older aircraft with new planes.
However, the company has been able to defer the delivery of 24 aircraft from Airbus through to 2022, which Lundgren said boosted its cash flow and vastly reduced its near-term capex program. The new arrangement would see it pay £2.5 billion in the financial years 2020-2022, with £1 billion of that in 2022.
Following the result of the vote on Friday, Barton said: “The airline industry is facing unprecedented challenges and the Board’s immediate priority has been to take the necessary steps to successfully guide easyJet through this period of uncertainty.”
He added: “The Board seeks good relationships with all of the Company’s shareholders and hopes to be able to re-engage constructively with Sir Stelios.”