Stelios escalates row with easyJet

Stelios escalates row with easyJet

Just hours after releasing financial results suggesting the airline had weathered the economic storm, easyJet has hit turbulence with founder Sir Stelios Haji-Ioannou.

The Luton-based airline confirmed yesterday revenue rose by more than five per cent in the three months to June, despite the volcanic ash cloud costing it £65 million.

Despite this performance, the airline has been plagued with punctuality issues during the summer season, resulting in a withering attack from the flamboyant owner.

In a letter addressed to easyJet chairman Sir Michael Rake, Stelios has threatened to withdraw the ‘easy’ brand from the airline as concerns over increases in cancellations and poor punctuality at Gatwick persist.

Branding the company an “operational mess”, the founder – still the largest single shareholder in the organisation – issued a cure notice, threatening to withdraw the brand in 90 days if services did not improve.

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Stelios Letter

In his letter, Sir Stelios said: “The result of the operational mess that the company is in is that it has too few staff to meet the number of flights it has sold.

“This leads not just to delays but a serious increase in cancellations, seemingly many at the last minute.

“This is extremely detrimental to the goodwill and reputation of the airline and the brand in particular.

“Many years of carefully building goodwill is being eroded in a matter of months.

“As the owner of this brand I cannot stand by and let this happen.

“This is why I have served a cure notice demanding easyJet improve its punctuality and cancellation performance.”

Reaction

However, easyJet has reacted to the claims by stating Stelios does not have the right to renegotiate the brand licence agreement over punctuality.

“EasyJet is advised that the brand licence does not impose or create any contractual obligation regarding on time performance and consequently easyGroup has no right to terminate the brand licence,” the airline said in a statement.

However, the airline has admitted to staff shortages, with incoming chief executive Carolyn McCall, who has been in the job for three weeks, focusing her attention on alleviating the concerns.

A shortage of pilots has been cited as a key reason for delays, with easyJet laying off a number of pilots during the depths of the economic crisis and failing to react to the unexpectedly busy summer.

Easyjet said cabin crew headcount has increased to 3,580 for the week ending July 12th compared with 3,321 in the same week in 2009 after a recruitment drive over the spring, while pilot numbers have jumped to 1,793 compared to 1,677 a year earlier.