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Stelios mulls buying Easyjet back

Stelios confirms retaking the airline private is a possibility
Easyjet founder Stelios Haji-Ioannou has confirmed reports that he is considering taking the airline private.
A spokesman for Mr Haji-Ioannou, whose company EasyGroup today owns 41% of Easyjet, confirmed that the Greek entrepreneur may buy back the firm.

The spokesman said no final decision had yet been made.

The comments come a month after Easyjet’s share price fell by 15% following a profits warning caused by the recent high price of fuel.

“It is an option but there is no further comment,” an EasyGroup spokesman quoted Haji-Ioannou as saying on Monday.

Easyjet’s share price rose by almost 3% following the news.

Not surprising

It had been reported at the weekend that Mr Haji-Ioannou, whose family owns 41% of Easyjet, may spend some £650m to take the business private.

This possibility has been around since Easyjet’s last profits warning and I would say it’s very feasible

Airline analyst Mike Powell

Easyjet share price

Founded in 1995, Easyjet warned last month that fuel costs could cut 2004 profits by about £4m ($7m) due to fuel prices.

Analysts said Mr Haji-Ioannou’s announcement was not unexpected.

“This possibility has been around since Easyjet’s last profits warning and I would say it’s very feasible,” said Mike Powell, aviation analyst at Dresdner Kleinwort Wasserstein.

Tough sector

Mr Powell said it would only have a positive impact on Easyjet’s share price.

Like all airlines, Easyjet has been hit by high fuel bills

“Clearly it’s going to be a factor in the share price,” he said.

The rise in fuel prices which has hit Easyjet’s profits comes at a time of extreme competition in the European airlines sector.

One key rival in the low-cost market, Ireland-based Ryanair, said its passenger numbers were up 24% to 2.27 million in June, when compared to the same month last year.

The company has been cutting prices to keep its seats filled, and its load factor – the proportion of seats filled – was 87% of capacity, up from 79% in the same month the previous year.

“These figures are in line with our previous guidance of increased load factors and declining yields through the summer,” a Ryanair spokeswoman said on Monday.

http://news.bbc.co.uk/1/hi/business/3866741.stm