Thursday 20 January, 2011
easyGroup Holdings
Comment on easyJet Trading Up
RNS Number : 8417Z
easyGroup Holdings Ltd
20 January 2011
20 January 2011
Comment on easyJet Trading Update
Commenting on today's easyJet trading update and share price drop, Sir Stelios Haji-Ioannou, founder and largest shareholder of easyJet, said:
I would like to draw the attention of the investors in easyJet PLC to the statement I made last November:
http://www.easy.com/news/single/article/stelios-responds-to-easyjet-full-year-results.html?tx_ttnews%5BbackPid%5D=28&cHash=a8a9ca6f63
and I quote from the statement dated 16th November, 2010
"The management of easyJet also needs to carefully assess the financial viability of any fleet expansion. If the profit target per aircraft is roughly £2m, then the company should only buy more aircraft (over and above the 200) if it has identified specific new routes for these new aircraft that produce that amount of profit per aircraft. New route data should be shared with all shareholders for transparency.
"I remain very concerned with the strategy of the previous management which expanded the fleet to develop summer holiday routes leaving it with approximately 40 aircraft parked over the winter. Parked aircraft lose money."
Unquote
Commenting today (20th January, 2011) Stelios said:
"It is now clear to me with losses of £180m in the six months of the winter, it will be impossible for the company to make an annual profit of more than £480m which represents the 12% return on capital employed in a 200+ aircraft fleet.
"The business is too seasonal for its own good and it should not blame the weather every year.
"I wonder where the latest 15 additional Airbuses ordered earlier this month will be deployed next winter without losing even more money? There are not many un-seasonal routes left in Europe."
Ends