Stelios Haji-Ioannou, the founder and biggest shareholder of British no-frills airline EasyJet, said on Monday that he would vote against the board's recent agreement to buy 135 Airbus single-aisle A320 passenger planes.
The entrepreneur, known simply as Stelios, delivered the news in a letter to fellow shareholders, arguing that its was a "bad deal" owing to the high cost, despite going on to slam what he called a "secret deal with Airbus" owing to the absence of an official price.
Haji-Ioannou admitted that he still expected the deal to go ahead at a vote set for July 11, but his deep opposition is another headache for the EasyJet board after a number of run-ins between the two parties in recent times over the company's direction.
"As the person with the most to gain if this company increases profitability and the most to lose if the outcome from this order is not as promised by the board, it is my firm opinion that this is a good deal for Airbus and a bad deal for easyJet shareholders," Haji-Ioannou wrote in his open letter dated Monday.
"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 added.
EasyJet announced the deal last month, which includes an agreement to buy 100 new generation Airbus neo aircraft.
EasyJet at the time said it had negotiated "very substantial" discounts on the combined list price of $11.9 billion (8.9 billion euros). Industry sources told AFP that EasyJet may end up paying only half the amount.
"This industry is full of commentators willing to speculate on the scale of the alleged discount," Haji-Ioannou said in his letter.
"I have seen analysts' speculation of between 40 percent and 60 percent 'off the list price'. The problem is one of comparison.
"If the starting list price is a fiction which always goes up with time and doubles over the next decade -- then the discount has just evaporated! No other industry is willing to buy its assets on such biased and supplier friendly terms," he added.
EasyJet has yet to respond to the letter.
Under the deal agreed on the sidelines of the Paris Air Show, EasyJet has also an option to buy an additional 100 A320neo planes.
Amid the tensions between Haji-Ioannou and the EasyJet board, Mike Rake recently stepped down as group chairman to be replaced by John Barton, who has also remained in his role as chairman of British clothing retailer Next.
Haji-Ioannou meanwhile last year launched the first pan-African no-frills carrier, Fastjet, while he and his family still own almost 37 percent of EasyJet.
by Serge DANIEL © 2013 AFP
Date: Jul 1, 2013