MIAMI – easyJet’s (EC) founder Sir Stelios Haji-Ioannou has threatened the airline’s executives with lawsuits due to a large Airbus order not yet being canceled.
It is understood that the airline may run out of money by August of this year if the £4.5bn order for Airbus aircraft is not canceled.
Stelios warned that going through with this order may result in the airline not being able to pay off its £600m government loans in time, himself stating that the order would be a “misuse of UK taxpayers’ money”.
Today saw him continue with his reinforced demands to remove easyJet’s Chief Financial Officer Andrew Findlay from the role in order to “stop him from signing any more billion-pound cheques to Airbus every year”.
Stelios had also requested numerous meetings with the board but easyJet has rejected all requests so far.
The founder said in a statement, “Unless this vote of all shareholders is called without any further delay, I will request that more directors be removed. We must stop this river of money from the Bank of England via Luton airport to Toulouse where Airbus is based.”
Stelios added that if the French government wanted to spare Airbus from the cost of aircraft order cancelations, so “they can keep French people in jobs, then they must give such support as French state aid and not expect a British airline to foot the bill.”
He further warned that he would personally sue executives for a “breach of their fiduciary duties” if even a single penny was spent on the order.
The £4.5bn deal consists of 107 aircraft, including the brand new A320 and A321 new engine option variants.
An EC spokesperson has also commented on these proceedings from Stelios, continuing with the rejecting message of holding a meeting:
“The Board is managing the unprecedented challenges facing the airline and the aviation sector as a whole. We remain absolutely focused on short term liquidity, removing expenditure from the business alongside safeguarding jobs and ensuring the long-term future of the airline.”
“We believe that holding a general meeting would be an unhelpful distraction from tackling the many immediate issues our business faces.”
“The board fully supports Andrew Findlay, easyJet’s CFO, and stands by its collective decision to access the CCFF which was made in the best interests of the company.”
easyJet has grounded all 330 airplanes so far due to the COVID-19 pandemic.
The £600m loan that has been mentioned is from the UK’s COVID Corporate Financing Facility, which is expected to be repaid by March 2021.
On top of this, the airline said it would borrow another £406m from creditors as part of its “focus on maximizing liquidity”.
This conflict remains something significant, especially with Sir Stelios appearing to be losing some level of control and power over the British carrier.
With the board rejecting any measures of a general meeting and backing its current chief financial officer, it is likely that easyJet will go through with the order and try and make room for liquidity by August.
In all, it is something that will have to be kept a solid eye on as we enter the Summer 2020 season and see whether EC can back itself up financially in that period.