(Alliance News) - easyJet PLC's founder intensified a dispute with the budget airline's senior board members on Thursday, calling for the removal of its chair and chief executive officer.
Stelios Haji-Ioannou has previously lambasted easyJet's board over a GBP4.5 billion order for Airbus SE aircraft.
Haji-Ioannou said: "I have previously referred those in charge of easyJet as scoundrels. This remains my view. They made a deliberate mistake in affirming the contract between easyJet and Airbus worth at least GB4.5 billion whilst easyJet has a grounded fleet of 337 Airbus aircraft.
"Instead of serving a notice of termination to Airbus to cancel the contract they have deliberately chosen to send at least GBP2.5 billion of our cash to Airbus in the years 2020-22. At least GBP1.5 billion of our cash (of the GBP2.5 billion) is shown as going to Airbus in the next next months whilst the fleet could remain grounded."
Earlier in April, easyJet said it pushed back the deliveries of 24 aircraft until the end of financial 2022. The company earlier on Thursday said it has "no ability to terminate the contract" and would be liable to pay any future losses which the aircraft manufacturer could incur if the deal is terminated.
Haji-Ioannou added: "What the scoundrels are not telling us at all is how much money the company will burn each week after the resumption of flying which will be well in excess of the GBP40 million per week that they state that they burn whilst the fleet is grounded. Flying half empty planes will be heavily loss making.
"That GBP40 million per week of cash burn is before the payments to Airbus. The scoundrels at easyJet are now also planning to keep the number of aircraft in the fleet around the same level as now at 337 Airbus aircraft over the next 18 months. So they will clearly burn a lot more of our cash in 2021. There is no way the demand for passenger flying in 2021 will be the same as 2019."
Haji-Ioannou has now called for Chair John Barton and Chief Executive Officer Johan Lundgren to be ousted: Lundgren for authorising the order and Barton for not calling for an inquiry on it.
The founder had previously called for Chief Financial Officer Andrew Findlay and Non-Executive Director Andreas Bierwirth to be removed.
"If I succeed in removing the four directors at the forthcoming meetings, I expect the rest of the board to promote the chief operating officer to acting CEO to run the 'aircraft parking lot' and to serve notice of termination to Airbus. Any attempt to operate a fleet of more than 250 aircraft (down from 337 now) is bound to just burn a shed load of cash in 2021. I hope the remaining scoundrels will follow that fleet plan and cancel the order for new useless Airbus aircraft that will lose a lot of money," Haji-Ioannou added.
Shares in the company were up 1.5% to 612.40 pence each on Thursday afternoon in London.
Earlier on Thursday, easyJet offered a mixed first half picture and added that it has secured extra funds of nearly GBP2 billion to help the budget carrier grapple with the financial bite of the Covid-19 pandemic.
In the six months to March 31, easyJet's reported pretax loss is forecast to stretch to between GBP360 million and GBP380 million from the GBP272 million it reported in the year prior.
The reported pretax figure includes a hit between GBP175 million and GBP185 million in relation to over-hedging of fuel and foreign exchange.
On a headline basis however, the pretax loss for the first half is to narrow to between GBP185 million and GBP205 million, from GBP275 million.
Revenue, meanwhile, is forecast to grow 1.6% to GBP2.38 billion from GBP2.34 billion, though seat capacity slipped 7.6% to 42.7 million from 46.2 million.
CEO Lundgren said: "Our first half trading performance was very strong prior to the impact of coronavirus, which shows the strength of easyJet's business model. Since then I have been immensely proud of our team, right across the business, and the way they have worked through these tough times to put us in the strong position we are in now."
First half passengers flow were down 7.4% annually to 38.6 million and seats flown down 7.6% to 42.7 million.
In Thursday's stacked update, easyJet also said it has secured roughly GBP400 million on two term loans, secured against its aircraft assets.
Earlier in April, it said it was issued with GBP600 million under the UK's Covid corporate financing facility. The carrier has also drawn down a USD500 million revolving credit facility.
"Furthermore we continue to engage with an active lessor market interested in acquiring aircraft from easyJet's fleet on a sale and leaseback basis. Announcements on the progress of these engagements will be made in due course, with anticipated proceeds expected to be in the range of GBP400 million and GBP550 million," easyJet added.
The company said that upon closure of all these funding schemes, it will have generated total additional funds between GBP1.85 billion and GBP1.95 billion.
The company's entire fleet was grounded on March 30, but it said its winter 2020/2021 seats were released earlier than usual. Bookings for the winter season "are well ahead" on the year prior.
"At this stage there can be no certainty of the date for restarting commercial flights. We will evaluate continuously based on changing regulations and customer demand," easyJet said.
Aside from the contentious Airbus deal, easyJet added on Thursday that it has cancelled or deferred a number of other projects, chopping its capital expenditure by about GBP1 billion.
By Eric Cunha; ericcunha@alliancenews.com
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