EasyJet to defer delivery of 24 Airbus planes, hold shareholder meeting

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LONDON, April 9 (Reuters) – British airline easyJet EZJ.L on Thursday said it would defer the delivery of 24 Airbus AIR.PA jets and hold a shareholder meeting after the airline’s founder Stelios Haji-Ioannou stepped up a disagreement over the airline’s expansion plans.

The move comes a day after Airbus announced plans to cut jetliner production after the coronavirus epidemic triggered aviation’s worst industrial crisis and drastically reduced deliveries to cash-starved airlines.

The European manufacturer said it had received requests for postponements and deferrals into next year.

EasyJet’s biggest shareholder Haji-Ioannou demanded on Wednesday a shareholder vote to remove two directors, as part of his battle to try to force the British airline to cancel an order for 107 Airbus planes .

Haji-Ioannou says the new jets are useless given the crippling impact of the coronavirus pandemic on air travel and that their 4.5 billion pound ($5.5 billion) price tag threatens the firm’s survival.

The airline has been forced to ground its fleet due to travel restrictions in light of the spread of the coronavirus.

“Our industry is facing unprecedented challenges which require unprecedented action. As we have consistently said, we remain completely focused on improving short term liquidity and reducing expenditure across the business,” easyJet Chief Executive Johan Lundgren said in a statement.

“I am pleased to announce that we have agreed with Airbus to amend our delivery schedule by deferring the purchase of 24 aircraft, providing a significant boost to our cash flow and a vast reduction to our near-term capex programme.”

The airline said it would defer the delivery of 10 aircraft deliveries in the 2020 financial year, 12 aircraft deliveries in 2021 and 2 aircraft deliveries in 2022.

Exact dates for future deliveries of the deferred aircraft were still to be agreed, easyJet said.

Lundgren added that the airline had 24 leases up for renewal over the next 16 months, “which gives us another level of flexibility to respond to future demand.”

EasyJet said that following a notice to requisition a general meeting on behalf of Haji-Ioannou’s easyGroup, it intended to call a general meeting, but did not give a date.

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