EasyJet Chairman Calls on Investors to Vote Down Founder Revolt

EasyJet Plc Chairman John Barton has written to shareholders urging them to vote against the airline’s activist founder in next week’s showdown over an Airbus SE contract.

The May 22 vote will see Stelios Haji-Ioannou call for the removal of four company directors, including Barton and Chief Executive Officer Johan Lundgren, to put pressure on management to cancel an order for more than 100 jets. Several influential advisory firms have backed the British low-cost carrier, calling on investors to reject the resolutions.

EasyJet’s board and management have been “very actively planning” a range of possible scenarios to get through the aviation crisis caused by the Covid-19 outbreak, Barton wrote in a May 14 letter. They have already deferred delivery of 24 Airbus aircraft and have a further 24 leases up for renewal over the next 16 months.

The board “strongly disagrees with Stelios Haji-Ioannou’s view that the Airbus contract should be terminated,” Barton said, adding that it has “given considerable thought to how best to ensure we come through the crisis in the strongest position possible.”

With the showdown set for next week, Haji-Ioannou, EasyJet’s largest shareholder, has ramped up his own years-long campaign to get the 4.5 billion pound ($5.6 billion) order canceled. He has accused some directors of being “scoundrels” and potentially corrupt, and offered a 5 million-pound ($6.2 million) reward for information that helps secure the cancellation.

Airlines around the globe are canceling or deferring jet orders as the pandemic leaves them with almost entirely grounded fleets. The dispute between management and the founder of one of the world’s biggest low-cost carriers is an extreme example of the pressure carriers face as they seek to slash costs to survive the crisis.