- EasyJet says it will defer delivery of 24 Airbus A320 jets in three years.
- British low-cost airline's founder, Stelios Haji-Ioannou, disagrees with its expansion plans.
- Haji-Ioannou seeks to oust two of the EasyJet's directors and cancel its order for 107 Airbus jets.
In its announcement on Thursday, the UK’s low-cost airline, EasyJet (LON:EZJ) said that it will postpone delivery of A320 jetliners. The British carrier also delayed its scheduled shareholder meeting following a disagreement with its founder, Stelios Haji-Ioannou, who said that the company is prioritizing expansion over profit growth.
In a recent board meeting, Stelios also called for the removal of Andreas Bierwirth from his role as the airline’s non-executive director. EasyJet was originally scheduled to have 24 Airbus jets delivered in three years.
Airbus To Slash A320 Production
Owing to the Coronavirus pandemic that has brought the global airline industry to a near halt and has pushed the carriers into deferring deliveries to cut costs, Airbus said on Wednesday that it plans on slashing the production of its world-renowned A320 jetliner.
The world’s largest airplane manufacturer highlighted on Wednesday that it has already received requests to delay deliveries that penetrate 2021.
Haji-Ioannou is the largest shareholder of EasyJet. On Wednesday, he called for a shareholder vote targeted at ousting two of the airline’s directors to push the British carrier into withdrawing its order for 107 jets from Airbus.
The founder argues that in the wake of the ongoing Coronavirus pandemic and its impact on the global travel industry, the new jets will add no value to EasyJet’s services. The price tag of £4.5 billion, he added, also threatens the airline’s financial stature.
CEO Johan Lundgren’s Comment
EasyJet had to ground its entire fleet last week to cut costs and cushion the economic blow from COVID-19. According to CEO Johan Lundgren of EasyJet:
“Our industry is facing unprecedented challenges which require unprecedented action. As we have consistently said, we remain completely focused on improving short term liquidity and reducing expenditure across the business. I am pleased to announce that we have agreed with Airbus to amend our delivery schedule by deferring the purchase of 24 aircraft, providing a significant boost to our cash flow and a vast reduction to our near-term capex programme.”
EasyJet plans on spanning the deferral over three years. 10 aircraft, as per the company, will be deferred this year, 12 in the next year, and the remaining 2 in 2022.
EasyJet is currently trading at 681 pence per share in the stock market. The airline has shed around 55% in 2020 so far. At the time of writing, it is valued at £2.71 billion.