Stelios mulls move to stop Easyjet Airbus deal

An Easyjet Airbus at Geneva Airport. Picture: Getty/AFP
An Easyjet Airbus at Geneva Airport. Picture: Getty/AFP
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EASYJET founder Sir Stelios Haji-Ioannou is considering legal action to stop the company pushing ahead with a deal to buy 135 new Airbus planes after being outvoted in a shareholder meeting.

A spokesman for the businessman said a legal challenge was “under active consideration” but details would have to be discussed with lawyers.

Stelios opposed a deal to buy planes valued at a list price of about £7 billion because financial details were not disclosed. He argued the move was “a good deal for Airbus and a bad deal for EasyJet shareholders” and would come at the expense of profit margins.

“I am not against replacing aircraft that have reached the end of their economic life. However, I am against buying aircraft that are three times more expensive than the ones I bought with my own money in the early 2000s,” he said.

He remains the company’s largest shareholder but his 37 per cent stake is not enough alone to block a decision by the board, with which he has vociferously disagreed on a number of occasions.

After the purchase was approved by 57 per cent of investors yesterday, chairman John Barton said: “The vote in favour of our new fleet arrangements will allow EasyJet to continue its successful strategy of modest, profitable growth and sustainable returns for our shareholders.”

Barton reportedly took a conciliatory tone following the meeting, saying the pressure Stelios put on the board was often positive and ensured management took a meticulous approach to decision making.

Stelios founded the airline business in 1995 but quit the board in 2010 after a row over strategy. He attempted to oust previous chairman Sir Mike Rake on several occasions.

When the deal for 35 current-generation Airbus A320s and 100 A320neo planes was announced last month, EasyJet chief executive Carolyn McCall said it had been secured at “highly attractive prices” representing a greater discount to the list price than its current contract with the European plane-maker.

The planes are due for delivery between 2015 and 2022, and the group also has the option to buy up to 100 further A320neo jets, which are expected to cut costs per seat by up to 12 per cent compared with the A319 model.

The move will allow EasyJet to replace more than 80 of its current 211-strong fleet, as well as giving it room to add routes.

Analysts have welcomed the deal, saying it ensures the carrier will not be left behind in the race to upgrade to more efficient modern aircraft as Airbus and US rival Boeing fill up their order books.

Damian Brewer, an analyst at RBC Capital Markets, estimates that EasyJet secured a discount of between 45 and 50 per cent from Airbus.

And he said efficiency savings and the possibility of growing capacity on established routes meant profits would not necessarily be sacrificed.

He said the key to the deal was that it gave the firm the flexibility to react to changing situations given that the economic recovery was not secure across its markets.

“[EasyJet’s] pragmatic new aircraft order leaves it better positioned to exploit pragmatic growth opportunities,” he said.