Diverging voices at easyJet’s head
Ever since Sir Stelios left easyJet’s management, the ex-CEO has been far from quiet. On the contrary, Sir Stelios is still the company’s major shareholder and seems to have taken quite a pleasure from giving his opinion on each an every one of the company’s decision. To give him (and easyJet’s management) some credit, that doesn’t seem to have refrained the airline from maintaining a steady growth and satisfying results (except for that last month, of course).
It’s starting to be hard to believe that Stelios wants the best for his (ex) company, especially with that whole starting-a-rival-airline affair. But Stelios still owns about 38 percent of the company. And that means he has all interest in wanting the best for easyJet. It also means he weighs (figuratively) quite a bit at a shareholders meeting. And that’s were the real problems arise: agreeing on what “the best” is for easyJet.
The most recent example of such a conflict may be found in the very public exchanges between Sir Stelios and easyJet’s chairman Michael Rake. With the former accusing the board of wasting away company’s money on expensive planes and executive bonuses, and Rake answering with a firm and decided “no” and “no”. Granted, the chairman’s answer was a bit more elaborated than that.
To Sir Stelios’s affirmation that 1,5 billion $ for new planes was a rip-off, Rake politely answered that the real number was actually less than half the one stated by Stelios. Undethered Stelios replied with a snarky comment putting forward his experience in the sector. “I can spot a bad deal when I see one” stated the irate founder. But the real bad deal for the founder comes from the board itself, which granted 12,6 million $ in bonuses this year. Stelios pointed out that the board has no trouble congratulating itself on the company’s returns as it only compared numbers with that of Air France, Lufthansa and British Airways.
Stelios may be longing for the days when easyJet was a start-up airline, blazing past slower growing traditional behemoths, but the reality is there: easyJet has reached a point where there’s not enough market demand to feed a sky-rocketing growth similar to that of a successful start-up. But that doesn’t mean easyJet’s not succeeding. The real problem for Stelios may be that easyJet’s is trying to secure the upper-end of the low-cost market, flying to larger hubs and appealing to business travellers, but that doesn’t mean that the company has no future. It just means times have change and maybe Stelios should stop looking at the airline like a purely financial product and more like the – reasonably – successful corporation it really is. That a least, would avoid slowing down the company.