Stelios Haji-Ioannou says passengers are paying 33% more for flights than in 2009 and may rebel against further increases
Passengers are paying a third more for tickets than they were four years ago at the "low cost" flyer easyJet, and may rebel against further price increases, the company's founder, Sir Stelios Haji-Ioannou, has warned.
The entrepreneur, whose family owns 36% of the share capital in the airline, made his comments in a circular to other investors before the company's annual general meeting in 11 days' time.
It is the latest in a series of broadsides from Haji-Ioannou against expansion plans by the easyJet management and in particular the chairman, Sir Mike Rake, who handed in his resignation last month but wants to stay on until the summer.
Arguing that easyJet should not commit itself to heavy expenditure on three new Airbus aircraft at present, Haji-Ioannou said: "The company is doing better now because the prices have gone up but so have the costs. The unit costs have risen by 24% since 2008 and the average customer is now paying 33% more than they were paying four years ago. What happens if the consumers refuse to pay the even higher fares next year? We are then stuck with a higher cost base."
Among the costs under fire from the former chairman at easyJet are the "overpaying" of directors at the company such as the chief executive, Carolyn McCall, and her chief financial officer, Chris Kennedy. "The CEO and CFO made £5m and £3m respectively for FY [full year] 2012 alone. It is an unjustifiable salary advance of about 10 times on what they were earning at their previous employers only two years ago," he argued.
McCall is a former chief executive of the Guardian Media Group, publisher of the Guardian, while Kennedy was chief investment officer and president of EMI Music's corporate development unit.
The Greek-Cypriot airline founder said he would vote against the easyJet remuneration report at the AGM on 21 February and against the re-election of Rake, whom he unsuccessfully tried to remove at an extraordinary general meeting in August.
Haji-Ioannou argues that Rake has too much on his plate: he is also deputy chairman of troubled Barclays Bank and a director at McGraw Hill, the parent group of the Standard & Poor's rating agency, which is being sued by the US government.
"Rake is too busy anyway to do justice to all these jobs. He should have resigned before the EGM last year and that would have saved the company money. I have no favourites in who the next chairman would be. I just want someone who hates Airbus and hates taking large gambles with our money," he wrote in the circular.
The airline, whose shares are at an all-time high and surged 25% after it posted better-than-expected results last month, said it was encouraged that the investor advisory service ISS had urged shareholders to vote in favour of all resolutions at the AGM.
It added in a statement: "Our institutional shareholders have strongly supported the board at recent general meetings and we are confident that they will continue to do so at easyJet's forthcoming AGM."
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