EasyJet founder warns airline will ‘run out of money around August’
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The founder of one of the largest low-cost carriers in Europe says the airline has enough money to keep it afloat until around August. EasyJet founder Stelios Haji-Ioannou said on Monday that the airline would run out of money by August unless it scraps an order it has on the books with aircraft manufacturer Airbus.
Haji-Ioannou said that the airline should cancel its £4.5 billion Airbus order for 107 “useless” aircraft. While Haji-Ioannou has no executive role in the company, his family owns about 34% of its shares. In addition to calling on the airline to cancel its Airbus order, Haji-Ioannou is also calling on the airline to remove its Chief Financial Officer Andrew Findlay and director Andreas Bierwirth.
“If this £4.5 billion liability to Airbus is preserved — and not cancelled — by the EasyJet board then, I regret to report, EasyJet will run out of money around August 2020, perhaps even earlier”, Haji-Ioannou wrote in a statement.
The airline has faced a collapse in demand among passengers in the light of the coronavirus pandemic. As a result, it’s completely suspended passenger operations and grounded its fleet throughout April and May.
“Terminating the Airbus contract is the only chance current shareholders have to maintain any value in their shares”, Haji-Ioannou wrote. “If easyJet terminates the Airbus contract, then it does not need loans from the UK taxpayer and it has the best chance to survive and thrive in the future”.
According to The Independent, EasyJet said in a statement: “The board is managing the unprecedented challenges facing the airline and the aviation sector as a whole. We remain absolutely focused on short-term liquidity, removing expenditure from the business alongside safeguarding jobs and ensuring the long-term future of the airline”.
The prediction that EasyJet would run out of money by August is based on an “optimistic forecast” by an analyst at Credit Suisse, the airline’s house stockbroker, which predicted the airline will have a cash short fall of £164 million by September 2020.
Featured photo by Alberto Riva/The Points Guy.
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