easyJet's new Airbus order: let the shareholder battle commence

Following an 18 month appraisal process, easyJet announced on 18-Jun-2013 the order of a further 35 current generation A320 aircraft under its existing Airbus deal and a new order for 100 A320neo aircraft, plus a further 100 A320neo purchase rights. CEO Carolyn McCall argued that the deal will enable continued capacity growth of 3%-5% per annum, with costs per seat 11%-12% below its current A319 operations, and support easyJet's return on capital targets: "Both from a growth perspective, modest cautious growth, but also from a cost perspective, this deal is absolutely critical for the long-term success of easyJet."

The agreement with Airbus must be approved by shareholders at an EGM on 11-Jul-2013, setting up another potential battle with founder and largest shareholder Sir Stelios Haji-Ioannou, who labelled it: "Yet another huge capital expenditure deal with the same supplier at 'secret' prices... Naturally it raises more questions than answers."

easyJet's strong share price performance - it has trebled over the past 18 months while the aircraft order was being considered - suggests that the other shareholders agree with Ms McCall.