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Andy Harrison, long-standing chief executive of easyJet, today announced his departure from the budget airline after two bruising years of on-off battling with its founder and largest shareholder Sir Stelios Haji-Ioannou.
EasyJet said in a carefully worded statement that Harrison, who is well-respected in the City, would not be leaving until June next year and that he wanted to "seek new challenges".
But industry experts pointed out that Harrison's strategy for growth had effectively been stifled this year when the board announced it would, in future, look for only 7.5% annual growth in passenger numbers rather than the 15% it has shown in the past.
Haji-Ioannou, who is now a non-executive director, had campaigned for easyJet to slow its growth rate and concentrate on generating cash and paying dividends to shareholders of whom he is the largest.
EasyJet shares fell 8½p to 368½p on the news of Harrison's departure which coincided with easyJet's confirmation that Sir Mike Rake will take over from Sir David Michels as the airline's chairman on 1 January.
This follows the early departure of former chairman Sir Colin Chandler after falling out with Haji-Ioannou and the more recent move of finance director Jeff Carr to First Group.
Rake's appointment to the board as heir apparent caused controversy earlier this because he is also chairman of another major company BT and on the board of Barclays.
Although that does not technically break corporate governance rules both companies are seen by institutional investors as requiring an unusually high commitment from their chairman.
Today's announcement also said that Harrison, who was on a six-month contract, had agreed to extend the retention clause in his contract to take him through to the end of June next year to enable a "smooth transition."
Harrison will receive a pay-off, the size of which easyJet declined to reveal today.
In the full year to September 2008 he received a salary of £590,000 and a bonus of £266,000.
In the most recent year to September easyJet's profits fell 65% to £43.7 million but it pointed out that it was one of only two profitable airlines in Europe - the other being arch-rival Ryanair.
Harrison also owns about £1.7million worth of easyJet shares and has share options.
Reader views (3)
Let's hope Mr Harrison's replacement doesn't subscribe to the ready steady charge method of boarding aircraft.
- Colin Brightwell, Woking UK, 09/12/2009 22:39
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Sheila, I'd blame the French rather than easyjet....I flew easyjet from Newcastle to London earlier this year because it was the cheapest option (even though it was not that cheap, it was cheaper than the train) and it was OK. I don't ask for much from airlines, not even flag-carriers anymore, but I do expect to be fed and watered on scheduled carriers. BA have just cut costs and my journey here on a full fare economy ticket got me a slimy cheese sandwich on white bread made with some kind of lunch-filler and one g and t. I will be forced to use the return half during next year, but until then I'll avoid them like the plague. I shall be flying back on Tunisair for xmas, thank you very much. By the way, I avoid ryanair even more than like the plague.
- David Short, Tunis, Tunisia, 09/12/2009 11:59
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I have just returned from France by Easyjet Their standards have slipped Check in staff were rude beyond belief Easyjet has now become a greedy grasping enterprise even worse than Ryanair People will return to BA where there is at least there is a pretence of politeness Passenegers who only fly a few times year are getting fed up with being treated like cattle Maybe Stelios can fix it Mr Harrison is a disaster
- Sheila, london uk, 09/12/2009 09:57
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