EasyJet founder and shareholder Stelios Haji-Ioannau outlined his belief more modest growth during current conditions offers a better return for shareholders than chasing market share, in a keynote interview at the World Low Cost Airline Congress in Barcelona.
A well-publicised boardroom spat at easyJet over the pace of future growth was settled earlier this summer when easyJet adopted a new medium-term growth rate of around 7.5%. Speaking at a keynote session, Stelios played down talk of a boardroom rift saying people should not believe everything they read in the paper. But he also set out his view as to why he supports more modest growth plans.
”I generally believe the growth rate of any company, not just an airline, is something that needs to be debated,” he said, noting companies cannot grow without capital expenditure.
He says the more modest growth rate plans for easyJet will provide a better return for shareholders and, alluding to continued strong growth plans from other carriers such as budget rival Ryanair, questions the merit in chasing market share.
“It remains to be seen which growth rate will provide higher returns for shareholders,” he says. “Is market share in Europe that relevant? You need to concentrate on market share from A to B, preferably A being somewhere people live and B being somewhere someone wants to go. If you go for passenger count and market share, there is a risk. I think our business model is safer because we have lower risk.”