easyJet founder threatens to sell family stake

easyJet founder Sir Stelios Haji-Ioannou has warned directors he will sell his 37 per cent family stake in the airline if they enforce plans to buy new aircraft, according to reports.

easyJet founder Sir Stelios Haji-Ioannou has warned directors he will sell his 37 per cent family stake in the airline if they enforce plans to buy new aircraft, according to reports.

He voiced his concern over the company's expansion plans in an open letter published on Monday, accusing directors of "squandering" cash on new planes.

In protest, he threatened to sell his holdings in the company. Last week he disclosed that he had sold 200,000 shares in the low-cost airline while his brother and sister sold the same amount.

This brought their combined interest back to 37%, an investment of almost £1.3bn.

"This token disposal of shares sends a clear message to our directors," he wrote.

"If the board places another order for aircraft, it will destroy shareholder value into the future. If they place such an order now I will be looking to dispose of more of my stake before this happens.

"I will be a loyal shareholder for the long term provided management doesn't squander any more of our cash on new aircraft for at least the next four to five years."

easyJet is considering purchasing more fleet to replace aircraft and expand its business in Europe. However, the company is yet to decide on how many to buy.

Haji-Ioannou said the order would hinder the company's financial success.

He has been leading a campaign since 2008 for the airline to focus on "shareholder value and less on top line growth", to free up cash for dividend payments and restrict capacity growth.

The founder claims profits are rising only because easyJet is charging customers more than they did four years ago to fly.

Shares fell 1.95% to 855.00p at 16:06 Monday.

The airline did not immediately respond to requests for comment on his letter.

RD

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Of course bitcoin is a bubble – a bubble you can’t ignore
Bitcoin

Of course bitcoin is a bubble – a bubble you can’t ignore

Bitcoin’s wild ride is being called a bubble by many. And it is, says Dominic Frisby. But that’s not necessarily a bad thing. And it’s a bubble in whi…
13 Jan 2021
A simple way to profit from the next big trend change in the markets
Investment strategy

A simple way to profit from the next big trend change in the markets

Change is coming to the markets as the tech-stock bull market of the 2010s is replaced by a new cycle of rising commodity prices. John Stepek explains…
14 Jan 2021
I wish I knew what a SPAC was, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what a SPAC was, but I’m too embarrassed to ask

A financial instrument called a “special purpose acquisition company”, or SPAC for short, is growing increasingly popular in the US stockmarkets. But …
12 Jan 2021