Monday, 6 April 2020

easyJet will run out of cash during August says founder Sir Stelios Haji-Ioannou who also threatens to sack and sue the board -UPDATE - The carrier gets green light on £600 million government backed loan.

Sir Stelios Haji-Ioannou, the founder of one of Europe's most well known low-cost airlines easyJet has said the carrier will run out of cash by August if the lockdown continues and it doesn't cancel a massive aircraft order with Airbus.  

The larger than life Stelios Haji-Ioannou, whose family are still the major shareholders in the budget carrier, has been stamping his feet in an effort to get what he wants.  He's threatened the company he will sack a board member at the rate of one every seven weeks until the chairman John Barton caves in to his demands. 

Stelios says the airline's Finance chief Andrew Findlay is the next one to get the sack,  as ousting him "is the only way of preventing him writing billion-pound cheques to Airbus every year".

Read the letter to the board of easyJet from Stelios Haji-Ioannou below.

In a letter, Sir Stelios Haji-Ioannou seemed less interested in protecting the company, it workforce or passengers and more concerned with lining his own pocket, "Terminating the Airbus contract is the only chance current shareholders have to maintain any value in their shares."  Only last month, his family pocketed £60 million in share dividends from easyJet.  He also threatens to sue every board member if they go ahead with the Airbus order and easyJet then files for bankruptcy. 
Photo easyjet

"If Easyjet terminates the Airbus contract," Haji-Ioannou said, "Then it does not need loans from the UK taxpayer and it has the best chance to survive and thrive in the future with some injection of additional equity provided for by the markets".

Last week he told the media that the current easyJet fleet should be cut down by 100 aircraft to 250 from its current 350 aircraft level.  The order for 107 new Airbus aircraft should be cancelled straight away and the airline should cite force majeure to get out of any payment obligations.

A spokesperson for Airbus told us, "easyJet is one of the world’s most successful airlines, and operates one of the world’s youngest fleets of the world’s most modern aircraft - the A320 Family. All orders shown in the Airbus Order and Delivery tables are audited and firm – the details of which are confidential."

Johan Lundgren,  easyJet's CEO said: "We remain absolutely focused on ensuring the long-term future of the airline, reducing our costs and preserving jobs, to make sure easyJet is in the best position to resume flying once the pandemic is over."

The full letter from Haji-Ioannou to the easyJet board is here


easyJet has secured a £600 million loan from the Covid Corporate Financing Facility (CCFF), which is the UK's Treasury and The Bank of England’s emergency funds.  The airline has also said it would seek to borrow another  £407 million from other commercial investors, after Haji-Ioannou explosive letter that very nearly bought the airline to the brink of a massive internal power struggle.  Haji-Ioannou remains adamant that he and his family will not invest further funds while the Airbus order is still on the books. 

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