EasyJet founder warns airline 'at risk of running out of money by August'

“If this £4.5 billion liability to Airbus is preserved – and not cancelled – by the easyJet board then, I regret to report, easyJet will run out of money around August 2020, perhaps even earlier,” said Stelios in a statement, citing a forecast published by easyJet’s house stockbroker.

“If easyJet terminates the Airbus contract, then it does not need loans from the UK taxpayer and it has the best chance to survive and thrive in the future with some injection of additional equity provided for by the markets,” Stelios continued.

“But if easyJet stumbles along while taking UK taxpayers money as loans only to pass it on to Airbus, it will have to raise fresh equity anyway in the next three to six months – reducing the value of our current shareholdings to close to zero.

“In any event, no rational investor would be buying new shares in easyJet if the money will be used to pay £4.5 billion to Airbus for new planes it simply does not need. I will certainly not be throwing good money after bad. For the avoidance of doubt, I will not inject any fresh equity in easyJet while the Airbus liability is in place.”

Stelios added easyJet needed to plan to reduce its fleet from 350 to 250 as it “will not need any more additional planes for many years to come”, noting also how the carrier already had one of the sector’s youngest fleets.

An easyJet spokesperson told TTG: “The board is managing the unprecedented challenges facing the airline and the aviation sector as a whole.

“We remain absolutely focused on short term liquidity, removing expenditure from the business alongside safeguarding jobs and ensuring the long-term future of the airline.

“We believe that holding a general meeting would be an unhelpful distraction from tackling the many immediate issues our business faces.”