Stelios to vote against easyJet's 'secret' Airbus deal

Mon Jul 1, 2013 7:28am EDT
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By Rhys Jones

LONDON (Reuters) - Easyjet's (EZJ.L: Quote) estranged founder Stelios Haji-Ioannou said on Monday he would vote against the budget airline's plan to buy 135 new Airbus EAD.PA planes because they were not needed and their real cost had been kept secret.

Haji-Ioannou, better known as Stelios, founded easyjet in 1995 but quit the board in 2010 after a row over strategy. He still has a 37 percent stake and frequently disagrees with the airline on fleet expansion, executive pay and dividend policy, arguing that new jets hurt value for shareholders.

EasyJet announced last month it would buy 35 A320 aircraft and 100 new A320neo jets, with options for a further 100, adding that around two thirds of the new planes would be used to replace its ageing 156-seat A319s, the bulk of its fleet.

It did not reveal the value of the deal - which must be approved by major investors at a meeting on July 11 - but said it had negotiated a "very substantial" discount. The planes are worth around $11.

EasyJet sent a detailed circular to shareholders late last month and airline executives have been meeting top institutional investors to discuss the order over the last two weeks, sources close to the airline said.

Stelios said the company circular threw up an "unexplained difference" between the $76 million list price it gave for the planes and the $88 million for the same plane published on the Airbus website.

"I believe these decisions have been made behind closed doors mostly by City insiders playing with other people's money," Stelios said in a statement on Monday.

"It is also conceivable that people close to Airbus have bought shares in easyJet in order to influence the vote."   Continued...

EasyGroup Chairman Stelios Haji-Ioannou speaks during an interview with Reuters in Dubai February 25, 2007. REUTERS/Mohammed Salem