Posted on: 05 September 2011 by Ross McSweeny
easyGroup boss Sir Stelios Haji-Ioannou has called on easyJet to hold a shareholder’s meeting to vote on the removal of Professor Rigas Doganis (pictured) as a director of easyJet plc.
In his letter to the easyJet board requesting the meeting, Sir Stelios gives two major reasons for wanting Doganis removed. The first is that Doganis voted to purchase 35 aircraft from Airbus as announced by the company on 4 January 2011.
“We [easyGroup] believe that his decision was value destroying for shareholders because: (a) these aircraft come at a much higher price (up to $85 million each) than what the company has ever paid in the past for aircraft and (b) the directors have not identified the new routes that these aircraft can be deployed profitably. As a result the company will spend up to $3 billion with Airbus and will lose money as a result of this decision.”
Sir Stelios also accuses Doganis of failing “to foresee on 4 January 2011 the profit warning announced on 20 January 2011. That profit warning has since destroyed about a quarter of the company’s market capitalisation or some £600 million. Had the profit warning been announced before the aircraft order, we believe that the drop in the market cap would have necessitated a shareholder vote for the capital expenditure in circumstances where he would have known that the directors would have failed to obtain such approval,” the letter concludes.