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EasyJet Shakes Up Boardroom |
| Posted by Administrator (admin) on Apr 10 2009 |
Javier Espinoza, 04.06.09, 12:10 PM EDT
Amid split over the direction of the company between the board and its founder, the firm appointed a new chairman.
A boardroom row over future expansions at "no frills" carrier easyJet has led to a shake-up at the top. The British airline said Monday it had appointed former BT Group head Michael Rake to replace Chairman Colin Chandler in July, following reports that Chandler had offered his resignation in February after differing with the company's founder over strategy.
Stelios Haji-loannou, who owns a 27.0% stake in the company, has reportedly been at odds with the easyJet board over expanding the carrier during the downturn.
Analysts said the appointment of new senior executives might help heal the split in the company. Public disagreement on the strategy hasn't helped easyJet's ( EJETF - news - people ) share price, and investors are looking for clarity on this issue, said Stephen Furlong, an analyst with Davy Stockbrokers. “Investors will also be paying a close look at the operating performance as we go into the summer,” Furlong said.
The analyst said that Haji-Ioannou might be preparing to renegotiate an agreement made in 2000 when the airline started trading publicly. The agreement stated that he has the right to become chairman at any time and to choose two non-executive directors of his liking, as long as he remained a key stakeholder.
Shares of easyJet rose 2.8%, or 13 cents, to $4.62 in morning trading in London. The company also posted a 6.3% drop in March passenger figures on Monday, which it attributed to the Easter break occurring later this year than last year.
Separately, easyJet parent company easyGroup is planning to return to the commercial property market as it presses ahead with the creation of a special investment vehicle to buy London office buildings at cheaper prices, which the company intends to turn into hotels and offices, two British press reports said on Monday. EasyGroup was not available for comment.
The changes at the board of easyJet were announced the same day Dermot Mannion, the chief executive of Aer Lingus, quit with immediate effect citing a need for "fresh thinking" in the loss-making Irish airline. His departure follows speculation of investor unease over the Irish flag carrier's strategy in the wake of a takeover battle with rival Ryanair. (See "Aer Lingus Rebuffs Ryanair.") Shares of Ryanair ( RYAAY - news - people ) fell 0.3%, to 3.00 euros ($4.00), while shares of Aer Lingus ( AELGF - news - people ) rose 7.5%, to 72 euro cents (96 cents) in afternoon trading in Dublin.
Thomson Reuters contributed to this article.
Last changed: Apr 10 2009 at 1:09 PM
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