EasyJet founder, Sir Stelios Ioannou, has declared a truce in his long-running dogfight with airline “scoundrels” that culminated in an unsuccessful boardroom coup.
Haji-Ioannou has admitted that his spat with easyJet’s chief executive Johan Lundgren, who still holds a 15% stake in the airline, was motivated by a fear easyJet wouldn’t survive the pandemic.
Haji-Ioannou, in his first remarks since calling easyJet’s board of directors “scoundrels,” for their decision to push ahead with an order of Airbus planes during the pandemic he called on Lundgren as well as the chairman Stephen Hester praise the airline from its brink.
EasyJet’s return in the FTSE 100 index, after a 4-year absence, will be confirmed by this week.
Haji-Ioannou launched the airline in 1995, and listed it in the stock market in 2000. As he stepped back, his relationship with the executives began to deteriorate. He quit the board of directors after ten year following a disagreement over the airline’s expansion plans.
Haji-Ioannou, who retained 25 per cent of his airline, became a vocal and prominent critic of successive CEOs and chairs.
He said in 2012 that the board ran easyJet’s annual meetings “like Putin’s election in Russia”, because he couldn’t stop the reappointment then chairman Sir Mike Rake. In the years following, he attacked Chief Executive Dame Carolyn McCall for her pay of £6.5 million.
Haji-Ioannou praised Johan Lundgren’s efforts to bring the airline from the brink of bankruptcy
The relationship then plummeted to new lows when the pandemic struck in March and early April 2020. He called the directors “scoundrels” and threatened to sue them for breaching fiduciary duty. He also tried to remove half the board by a shareholder vote.
In a candid interview HajiIoannou revealed that he took the time to reflect. You have to go back to April 2020. I was terrified. “I thought the company was going to go bankrupt,” said he.
Lundgren, along with Stephen Hester (former chief executive of RBS), have tried to pivot easyJet to sell holidays instead of just flights. They are aiming to fill a market gap following the recent collapses by Thomas Cook and Monarch. The company reported record profits for the summer in November, and restored its dividend.
Haji-Ioannou stated that he had never expected “the holidays business to be substantial”, and was pleased with the results. EasyJet hopes that its holidays business will allow it to make more money from customers. It wants to increase the profit per flight from £7 to £10, or even more.
I think the business is running well, and that it could give an additional margin of £10 per passenger in profit.
“And I would like to mention Stephen Hester (for special credit). He is, in my opinion, a great chairman. Stephen is an excellent problem solver. The team deserves all the credit for achieving this level.”
Haji-Ioannou then turned to Lundgren and revealed that tensions have cooled. “The last time I criticized Johan and his team, I was afraid that the company was going to go bankrupt. He was the only one who stuck to it. He raised the funds. He grew the business. He invented the holiday industry. “I think he also deserves credit.”
He said: “As with all public companies, it is important to spread the credit.” But definitely, Johan deserves some credit.”
EasyJet has declined to comment.