The billionaire founder of British low-cost carrier easyJet has defended a £60 million dividend he received despite the current Covid-19 crisis slamming the airline’s finances and putting it on the brink of collapse. Instead, Sir Stelios Haji-Ioannou, who started easyJet with money from this family’s shipping fortune, said the “real elephant in the room” was a multi-billion dollar aircraft order that easyJet currently has outstanding with manufacturer Airbus.
easyJet has faced fierce criticism after pushing ahead with a £170 million shareholder dividend payout despite going cap in hand to the British government for a taxpayer-funded bailout. Sir Stelios received £60 million of the dividends because, easyJet claimed, it was legally obliged to complete the payout.
But while shareholders are enjoying a multi-million-pound reward, frontline employees including low-paid cabin crew have been asked to take two months of unpaid and accept sweeping changes to their terms, conditions and benefits as part of a massive cost-cutting effort.
Haji-Ioannou’s call for easyJet to cancel an existing aircraft order, however, could hit staff even harder and force the airline to layoff staff. The British government has insisted airlines now exhaust all commercial avenues to raise extra liquidity, including from shareholders, instead of relying on help from taxpayers.
But asking for help from shareholder is a red herring according to Sir Stelios.
“For the company to survive, it needs to cancel the current contract with Airbus citing ‘force majeure’ and aim to run an Easyjet fleet of 250 aircraft, rather than the current 350,” a spokesperson for Sir Stelios said.
easyJet has a total of 159 aircraft on order from Airbus, worth around £1.35 billion – an order that Sir Stelios says is “by far and away the largest threat to Easyjet’s future viability”.
Any reduction in aircraft should then be an “associated reduction in crewing numbers” – inferring that rather than give up any of his dividend, Sir Stelios would rather see frontline employees made redundant.
For it’s part, easyJet has insisted that it is trying to save as many jobs as possible, while also cutting back costs.
