Stelios in growing row with EasyJet

Published on Tuesday 18 November 2008 20:36

THE rift between EasyJet and Sir Stelios Haji-Ioannou deepened yesterday when the airline's millionaire founder refused to back the company's accounts.

Haji-Ioannou said accounting policies adopted by the board were "at odds with current commercial realities and the macro-economic environment".

Last week, the non-executive director increased his personal stake in the business to almost 27 per cent amid a row over future dividends. He wants the board to consider making payouts as the company scales back growth plans.

Haji-Ioannou is currently in discussions with the board about his request to appoint two non-executive directors.

EasyJet said the rest of the board were unanimous in their support of the accounts, while the figures were also approved by auditors PwC.

A 45 per cent drop in profits to 110 million reflected rising fuel costs and came despite a 31.5 per cent rise in revenues to 2.36 billion as passenger numbers increased by 17.3 per cent to 43.7 million.

The accounting concerns raised by Haji-Ioannou stemmed from the company's acquisition of GB Airways from British Airways earlier this year. In particular, he said the valuation of GB's Gatwick airport slots was too optimistic given the current economic climate.

Haji-Ioannou said discussions about the appointment of new directors were planned with the board.

He added: "I would like to place on record that I believe that, with careful cash management and in particular more prudent capital expenditure, EasyJet and its shareholders will be the winners in European short-haul aviation.

EasyJet shares closed 9.2 per cent lower at 251p after the escalation of the dispute.