EasyGroup calls for removal of Doganis from EasyJet board

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UK budget carrier EasyJet has received another letter from shareholder EasyGroup, this time requesting a meeting to vote on the removal of aviation consultant Rigas Doganis from its board.

In the letter, EasyJet founder Stelios Haji-Ioannou - who heads up EasyGroup - called for the removal of Doganis on the grounds that the former Olympic Airways chairman voted to purchase 35 Airbus aircraft earlier this year.

"We believe that his decision was value-destroying for shareholders because: a) these aircraft come at a much higher price (up to $85 million each) than the company has ever paid in the past for aircraft, and b) the directors have not identified the new routes [on which] these aircraft can be deployed profitably.

"As a result, the company will spend up to $3 billion with Airbus and will lose money as a result of this decision."

The letter goes on to accuse Doganis of failing to foresee the carrier's 20 January profit warning ahead of placing the aircraft order.

"Had the profit warning been announced before the aircraft order, we believe that the drop in the market cap would have necessitated a shareholder vote for the capital expenditure in circumstances where he would have known that the directors would have failed to obtain such approval."

EasyJet called the letter "a further unnecessary and costly distraction which is damaging to the company's reputation and undermines investor confidence".

Added EasyJet chairman Michael Rake: "We will encourage shareholders to reject this resolution and to demonstrate that the board has the support of the majority of shareholders. We will continue to encourage EasyGroup to meet with us in private to discuss their views on the business. We have made repeated efforts to do so in recent months."

EasyJet said EasyGroup's claims in its letter were "inaccurate", pointing out that the aircraft announcement in January "was for the exercising of options (agreed in 2007) for 15 new aircraft on terms substantially the same as those of previous EasyJet orders".

The carrier added that its 20 January trading statement "was not a profit warning" and that its "full-year expectations remained unchanged".

EasyGroup last month sent a letter to EasyJet, requesting the removal of deputy chairman David Michels.

Days later, Michels stepped down from the board with immediate effect, although EasyJet pointed out at the time that Michels and the carrier's board "entirely reject the allegations" made in EasyGroup's letter.

Today's letter is the latest in a series of hostile onslaughts against the carrier from Haji-Ioannou.