Sir Stelios threatens Easyjet stake sale over plane deal
- 21 January 2013
- From the section Business
Easyjet founder Sir Stelios Haji-Ioannou has threatened to sell more of his shares in the airline if it places an order for more aeroplanes.
Sir Stelios said he and his brother and sister each sold 200,000 Easyjet shares last week, taking their combined holding to just below 37%.
In an open letter to shareholders, Sir Stelios said the sale was intended as "a clear message to our directors".
Easyjet declined to comment on the letter.
Sir Stelios has been arguing against the airline's expansion since 2008.
Sir Stelios, who founded Easyjet in 1995, quit the airline's board in 2010 because of disagreements over strategy.
"If the board places another order for aircraft, it will destroy shareholder value into the future. If they place such an order now I will be looking to dispose of more of my stake before this happens," Sir Stelios wrote.
The low cost airline said last year that it was considering buying more aircraft, to replace some of its older planes or to expand flights into new areas.
At the time, Easyjet said that it would ensure shareholders were consulted and would have "the opportunity to vote on any future new generation aircraft orders".
However, Sir Stelios wrote: "Instead of ordering new aircraft, Easyjet should aim for a 10% profit margin, up from 1% four years ago and against the current level of 7%".
The dispute between the Easyjet founder and the board of the company centres on Sir Stelios' belief in creating shareholder value over what he terms "expansion at any cost".
"I am delighted to say that my campaign has worked well for all Easyjet shareholders," he said in the letter.
"The share price has tripled within four years. While the board fought me tooth and nail, the market agreed with me by pushing the share price to an all-time high."
The disagreement is not just confined to ordering new aircraft.
In 2012, Sir Stelios railed against what he called "fat cat bonuses" for Easyjet board members, and the year before he campaigned for the removal of one of the directors.
At the end of his open letter, Sir Stelios said: "I will be a loyal shareholder for the long term provided management doesn't squander any more of our cash on new aircraft for at least the next 4-5 years."