Stelios’ rift with easyJet deepens over accounts
Nov 19 2008 By Alun Thorne
The rift between easyJet and Sir Stelios Haji-Ioannou deepened yesterday after the airline’s millionaire founder refused to back the company’s accounts.
Sir Stelios 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 to almost 27 per cent amid a row over dividends. He wants the board to consider payouts as the company scales back growth.
Sir Stelios is 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 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 17.3 per cent to 43.7 million.
The accounting concerns raised by Sir Stelios stemmed from the company’s acquisition of GB Airways from British Airways this year. He said the valuation of GB’s Gatwick airport slots was too optimistic.
Sir Stelios said discussions about the appointment of new directors were planned with the board between now and the company’s annual meeting.
He added: “I would like to place on record I believe with careful cash management and in particular more prudent capital expenditure easyJet and its shareholders will be the winners in European short haul aviation. We must focus on cash flows forecasts not on more passengers.”
The Luton-based carrier said the withdrawal of competition on some routes and its decision to restrict growth meant its measure of revenues per seat flown would be slightly ahead in the first half of its new financial year.
Chief executive Andy Harrison described the full-year performance as good and said there was evidence the airline was benefiting from a “flight to value”.
He said the impact of fuel costs meant aircraft utilisation this winter will fall to an average of nine hours a day from 11.6 hours in the previous winter, mainly through the removal of some lower yielding flights.