British airline easyJet has said that it will defer the delivery of 24 Airbus jets and hold a shareholder meeting after the airline's founder, Stelios Haji-Ioannou, stepped up a disagreement over the airline's expansion plans.
The move, which means easyJet won't take any planes in the 2021 financial year, came a day after Airbus announced plans to cut jetliner production after the coronavirus epidemic triggered aviation's worst industrial crisis and drastically reduced deliveries to cash-starved airlines.
The European manufacturer said that it has received requests for postponements and deferrals into next year. EasyJet is among the first airlines to publicly outline its jet delivery deferral plans.
But the announcement did little to quell Haji-Ioannou's anger with the company's board, as he threatened to write to the Financial Conduct Authority (FCA) over its relationship with Airbus.
Haji-Ioannou, who is easyJet's biggest shareholder, has demanded a shareholder vote to remove two directors as part of his battle to try to force the British airline to cancel an order for 107 Airbus planes. EasyJet has confirmed that it intends to hold a general meeting.
Haji-Ioannou said that the new jets are useless given the crippling impact of the coronavirus pandemic on air travel and that their £4.5 billion pound price tag threatens the firm's survival. A source familiar with the matter said that the amount due is significantly less.
Haji-Ioannou demanded clarity over the arrangements with Airbus, and said that it would be "scandalous" to pay the plane-maker while easyJet was making no revenue.
"Although it is less than clear what deal Airbus and easyJet have cut with each other, the announcement only talks about "deferrals" of 24 out of 107 new orders," he said in a statement. "A deferral is the same as kicking the can down the road."
In response, an easyJet spokeswoman said, "The company is well aware of its obligations and constantly reviews its obligations under MAR [the Market Abuse Regulation]."
"Completely Focused"
The airline has been forced to ground its fleet due to travel restrictions in light of the spread of the coronavirus.
In February, easyJet said that it would work with all suppliers to further reduce costs, well in advance of the latest escalation of the row with Haji-Ioannou, whose family owns a third of easyJet's shares and who even before the coronavirus crisis was a critic of easyJet's strategy to buy more planes.
"We remain completely focused on improving short term liquidity and reducing expenditure across the business," easyJet chief executive Johan Lundgren said, without referring to the easyJet founder in his statement.
He added that the move provided "a significant boost to our cash flow and a vast reduction to our near-term capex programme."
The airline said that it will defer the delivery of 10 aircraft deliveries in the 2020 financial year, all 12 aircraft deliveries in FY21 and two aircraft deliveries in FY22.
Exact dates for future deliveries of the deferred aircraft are still to be agreed, easyJet said.
Lundgren added that the airline has 24 leases up for renewal over the next 16 months, "which gives us another level of flexibility to respond to future demand."
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