Stelios Haji-Ioannou’s battle with EasyJet management has entered a dangerous new phase
PITY POOR Carolyn McCall, chief executive of EasyJet. She’d have been naive if she hadn’t anticipated some tricky moments ahead with Sir Stelios Haji-Ioannou when she took over the top job at the budget airline 15 months ago, but there’s no way she could have prepared herself for this sort of turbulence.
In a move that has astonished the airline industry, not to mention EasyJet, Haji-Ioannou is preparing to launch a new airline, Fastjet. There are few further details as yet – simply a single, bright red webpage, Fastjet.com, bearing the message “by Stelios. Coming soon!”.
We don’t yet know what sort of fleet he is planning, whether he has leased any aircraft, which routes Fastjet will fly or whether it will go head to head with EasyJet, in which the billionaire entrepreneur and his family retain a 38 per cent stake.
If he does go ahead, though, it’s hard to imagine that with his experience he’d launch anything other than a low-cost carrier.
News of the new airline broke amid yet another flurry of accusations from Haji-Ioannou, who founded EasyJet 16 years ago when he was just 28.
He has accused EasyJet management of orchestrating a smear campaign, briefing against him in off-the-record conversations with selected journalists. These briefings, he says, release him from an agreement not to set up in competition with EasyJet.
The timing of Haji-Ioannou’s move is puzzling. Although he has been engaged in a long and increasingly bitter battle with EasyJet management on a number of fronts, peace seemed to have broken out between the two sides just last week, when the board bowed to pressure to pay a special dividend to shareholders.
Of the £190 million dividend (€218 million), £72 million goes to the EasyJet founder and his family, who remain the largest shareholders in the company.
After winning this payout, Haji-Ioannou dropped his demand for the removal from the board of non-executive director Rigas Doganis, a former chief executive of Olympic Airways, and hostilities appeared to have ended.
The threat to set up a new airline takes the bad-tempered battle into a dangerous new phase, although it’s hard to see what Haji-Ioannou is hoping to achieve by the move. A substantial chunk of his family fortune remains tied up in EasyJet and, if the company suffers at the hands of its new competitor, so will he.
But then perhaps it’s all bluster. Perhaps Fastjet is simply a threat; a ploy or a bargaining tool being cooked up by an entrepreneur who regrets giving up control of the business he founded, who wants to squeeze something else out of the management or who just wants to make more trouble.
Causing trouble – or simply threatening it – can be lucrative, as last week’s special dividend shows. But being in a constant state of war with investors, particularly one as powerful as the EasyGroup tycoon, must be hugely distracting and time-consuming, not to mention stressful, for McCall and the EasyJet management team.
Whether or not Fastjet takes off, the EasyJet management team would undoubtedly be better off devoting their full attention to steering the business safely through the global downturn.
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UNTIL YESTERDAY, few people within the City, and virtually no one outside the Square Mile, had heard of Alessio Rastani. But as his explosive interview with the BBC went viral, this independent trader became the new poster boy for all that ails the world's financial markets.
The American-accented trader, who apparently lives in south London, admitted going to bed every night dreaming of the money-making opportunities of another recession.
“Governments don’t rule the world, Goldman Sachs rules the world,” he declared, to the obvious astonishment of the studio presenter.
By Tuesday evening, his 3½-minute interview had clocked up almost half a million hits on YouTube and, such was the candour of his comments, there was widespread speculation that it was a hoax. Seasoned City hands thought otherwise, however, and marvelled that someone had at last revealed what we all know to be true – that traders are in business to make money.
Only an independent trader would have been be foolish (or publicity-hungry) enough to speak as unguardedly as Rastani; anyone employed by one of the major investment banks would have been sacked before he left the studio.
In fact, the only part of the interview that did not ring true was the bit where Rastani said he wanted to help people. That part surely was a hoax.
Fiona Walsh writes for the Guardiannewspaper in London