52 2GM Saturday June 11 2022 | the times
Business
5
Flyboys
Sir Stelios Haji-Ioannou, 55, the
Monaco-based entrepreneur and
the founder, former chairman,
largest shareholder and, in recent
years, ardent critic of easyJet. His
influence, while still great, has been
diluted by successive share issues
that reduced his stake from 33 per
cent to 15 per cent; and by his failed
putsch during the pandemic to
remove much of the easyJet board.Stephen Hester, 61, chairman of
easyJet for the past six months. He
has been chief executive at British
Land; at Royal Bank of Scotland
during the banking crisis; and at
RSA, the insurer. He has been called
analytical, ruthless and prickly.
Shares in easyJet are down 40 per
cent since he joined the board.Johan Lundgren, 55, chief executive
since the start of 2018 when he
walked into a row after the board
decided to pay him more than Dame
Carolyn McCall, his successful
predecessor. The Swede is a former
executive at the Tui package holiday
company and has prided himself on
his investment in data analytics to
make easyJet more efficient and
market-responsive.Peter Bellew, 58, chief operating
officer since 2020 and, at the sharp
end of easyJet’s operational
difficulties, has not enjoyed the best
of relations with the airline’s pilots.
Joined from arch-rival Ryanair,
which tried in court to prevent his
appointment. Previously chief
executive of Malaysia Airlines after
its loss of two jetliners in 2014.view on easyJet. Investors certainly
have. Its shares have been falling daily
since the turn of the month and are now
close to a ten-year low.
The industry is alive with speculation
that easyJet, with a fleet of more than
300 aircraft and one of the most recog-
nisable brands in the industry, is now a
takeover target. Its market value is back
down to £3.6 billion, about the level at
which Wizz Air, its smaller rival, made
an opportunistic approach at the end of
last summer. That was headed off by a
£1.2 billion rights issue, easyJet’s second
emergency fundraising of the pan-
demic.
Crucially, Sir Stelios Haji-Ioannou,
the carrier’s founder-turned-critic of
management, shunned the offer —
crucial because it diluted his stake toUK government’s post-Brexit immi-
gration policy and the failure to allow
European Union passport-holders
back into aviation jobs in Britain.
In the depths of the pandemic, easy-
Jet announced plans to make 3,000
people, or about 30 per cent of its staff,
redundant. In the event that figure was
nearer 2,000, with 1,100 of those in the
UK. The airline says it has re-hired
1,700 crew but concedes that the train-
ing of the last of them will not be com-
plete until the end of this month.
Morningstar, the investment
researcher, says that easyJet is in the
line of fire because proportionally it cut
more staff than its direct competitors
and that it is more focused than its
rivals on Britain, which has faced the
worst aviation labour shortages. SeniorOnly three weeks ago Johan Lundgren
was telling investors that easyJet was
“building resilience” into its operations.
The aim, the airline’s chief executive
said, was to halt the cancellations and
disruption suffered by its passengers
during the reawakening of the aviation
industry after the end of pandemic
travel restrictions.
Today, however, hardly a news bulle-
tin goes by without new tales of woe
from customers who have had their
holidays ruined or travel plans ditched
because flights have been scratched.
Since Lundgren’s comments last
month at the airline’s announcement of
winter losses of £545 million, more than
1,500 easyJet flights have been can-
celled at an average of 75 a day. Its worst
period was at the peak of the half-term
holiday travel: on the last Thursday of
May, nearly one in seven flights were
cancelled, 13.5 per cent, or 223, of the
scheduled 1,651; ten days later, on the
Sunday of the long holiday weekend,
9 per cent of services were down, or 157
of 1,751 scheduled flights.
According to scrutiny of data from
Cirium and Radarbox, the flight track-
ers, over the Platinum Jubilee easyJet
was responsible for 66 per cent of all
cancelled UK flights. The worst-hit
airport was Gatwick, the airline’s main
base, where it controls the majority of
take-off and landing slots.
A poor Easter, blamed on staff
sickness levels at the end of Covid res-
trictions, became a disastrous Jubilee
for the airlines. Amid a very public
blame game, there were allegations of
ingrained staff shortages at airports
and at the suppliers of ground-handling
and check-in services.
EasyJet’s French pilots have accused
the budget airline of presiding over
“unprecedented chaos”, cancelling
viable flights and suffering “operational
meltdowns” after its top executives
failed to heed warnings that the carrier
could not cope with surging summer
demand. A witheringly critical internal
letter from the airline’s French pilots,
obtained by the i newspaper, warned
that easyJet stood to suffer an exodus of
customers after thousands were left
stranded by the cancellation of hun-
dreds of flights during the school half-
term break and Jubilee bank holidays.
Passengers may have begun to form aQueues at Gatwick, easyJet’s biggestAnalysts say the airline
is to blame for the woes
which have caused its
share price to plummet,
reports Robert Lea
15 per cent, thereby removing a
poison pill, his ability to block any
takeover approach.
Chris Tarry, an independent
industry analyst, argues that easy-
Jet is to blame for its own woes. “It
was too ambitious in [the number of
seats] it offered and sold,” he said.
“Only a small percentage of its
flights have been cancelled, but the
reality is that if you are affected, the
impact is 100 per cent. It is difficult to
understand why there were so many
short-notice cancellations affecting
passengers who are already in the
airport.”
In a recent article in Airline Busi-
ness magazine, Tarry argued that this
summer the airline industry could be
afflicted by consumer “hogo” — the
“hassle of going out” — that affected
the public during the periodic relaxing
of lockdowns, when customers found
that pubs and restaurants simply were
not geared up to deal with the released
pent-up demand. “It is important for
airlines to recall that it is much more
expensive to win back a customer than
retain one,” Tarry said. “EasyJet is
responsible for its own planning and so
has to take a material amount of the
blame rather than blame others for its
situation.”
Paul Charles, an industry consultant
and adviser to several airlines over the
years, said: “EasyJet is one of the worst
airlines affected simply because they
expected to have a larger workforce by
now and so planned far more flights
than in 2019, but they have struggled to
recruit fast enough and, coupled with
delays in the processing of security
passes, they haven’t been able to get the
people in place fast enough. Cancel-
lations are their only option as they
would never consider bringing in spare
aircraft and crew from other airlines.”
The well-publicised staff shortage
throughout the aviation services chain
has its roots in the tens of thousands of
workers made redundant during the
pandemic, when the transport secre-
tary refused additional aid over and
above the Treasury furlough job
support scheme. The re-recruitment
programme was disrupted by the
general stop-start nature of travel
restrictions and then was felled by the
outbreak of the Omicron coronavirus
variant. By the time the industry could
recruit, it was doing so in a highly
competitive jobs market of near-full
employment. When it has been able to
recruit, security and past employment
vetting and training to make sure indi-
viduals are qualified and competent is a
process that is taking 12 weeks.
Jozsef Varadi, the Hungarian chief
executive of Wizz Air, has blamed theeEasyJet stuck on tarmac
Profits blow
turns heat
on ProCook
The soaring cost of living has forced
ProCook to halve its profit expecta-
tions in a warning that sent shares in
the kitchenware business down by
40 per cent yesterday.
The setback came only eight months
after ProCook had taken advantage of a
Covid-19 sales boom with a stock
market listing that valued it at £158 mil-
lion. Daniel O’Neill, the founder, and
his family made about £85 million from
selling shares in the listing at 145p.
Yesterday ProCook shares closed
down by 31½p at 46½p, valuing the
company at £50.2 million. They had
already lost two thirds of their value
over the past six months.
ProCook said it was facing challenges
“with customers affected by the well-
documented exceptional pressures on
discretionary spend”. It said that while
sales had been higher than pre-Covid
levels, they had weakened recently and
it was now noting a drop in the average
amount spent and in conversion and
repeat rates from customers, who were
choosing to buy a single pan, for
example, rather than a whole set.
It now expects adjusted pre-tax
profits of £4 million to £6 million this fi-
nancial year, compared with £11 million
suggested in January. It expects sales to
be flat against last year’s £69.2 million;
in January it had expected sales grow-
ing by a third to £81.9 million this year.
Analysts at Peel Hunt, which advised
on ProCook’s float, noted that the wider
kitchenware market had fallen by 15 per
cent in the past year and they reckoned
that the business would still increase its
market share.
Ashley Armstrong Retail Editor
Renault buys into online car servicing start-up
A British technology start-up that
enables car owners to get their vehicle
serviced without leaving the house has
been bought by Renault.
Fixter says it aims to make getting a
car serviced, repaired or MoT-tested as
easy as ordering a taxi or a takeaway.
Users can book their car on its website
to be picked up and taken to a service
centre and returned once the work is
complete. They also can request live
updates on the progress of repairs,
much like Uber or food delivery
services such as Just Eat.
Fixter says that it thoroughly vets its
network of independent garages to
guarantee a high standard of work and
competitive pricing for the customer
and claims to be the first company inBritain to offer what it calls an “end-to-
end” online car maintenance service.
Renault said yesterday that it had
acquired Fixter for an undisclosed sum
as part of a wider strategy to enhance its
online after-sales services. The aim is to
keep pace with a new generation of car
owners who prefer to shop for services
on the internet or feel that they do not
have time to take their car for servicing
and repairs.
The French car group will acquire
Fixter’s existing online platform and
customers, as well as its understanding
of the online car repair market. In
return, Renault says that Fixter will
gain access to its network of 2,500
Motrio-branded garages.
Motrio was created by Renault in
1998 as a service centre network that
covers multiple car brands, not onlythose under the Renault Group
umbrella.
Hakan Dogu, senior vice-president
of global after-sales for Renault Group,
said: “By acquiring the start-up Fixter,
we will be able to combine the expertise
and strike force of Renault Group and
its network with Fixter’s agility and
knowledge of all the digital aspects of
automotive maintenance.”
Under Renault’s ownership, Fixter
will continue to expand in Britain,
while there are plans to enter France in
the second half of this year and other
European countries in future.
Fixter was founded in London by
Limvirak Chea, 46, Frédéric Dermer,
45, and Cristian Vrabie, 35, in 2017.
Chea, the chief executive, was born in
the Philippines but grew up in France
and moved to Britain 16 years ago. Hesaid he had been inspired to create
Fixter when a garage failed to log his
appointment properly to have his car
serviced.
“That day I saw a problem that
needed solving,” he said. “When the
service centre lost my booking, not only
had I wasted a lot of time but my car was
also still not serviced. I wanted to make
getting a car serviced or repaired as
easy as ordering a pizza or booking a
taxi online, and that’s what we did.”
Fixter received early backing from
Axa, the insurance group, via its Kamet
Ventures investment division, which
funds and supports disruptive compa-
nies in insurance, health and mobility.
Based in Milton Keynes, it employs
about forty people but plans to hire
fifteen more in the UK and five more in
France later this year.Tracey Boles Deputy Business EditorTesla stock
split proposal
goes to vote
Tesla has proposed a three-to-one
stock split in the form of a stock divi-
dend, according to a regulatory filing.
The electric car maker said the pro-
posal will be put to a vote on August 4
and, if approved, would be the latest
after a five-for-one split in August 2020.
Elon Musk, chief executive, has ta-
bled a $44 billion bid to buy Twitter, the
social network, and is liable to pay
$33.5 billion in cash to fund that deal
with much of his wealth tied up in Tesla
stock. The filing said Musk currently
holds 23.5 per cent of Tesla shares.
Tesla will also ask shareholders to
vote to reduce its board of directors’
terms to two years from three.
Alphabet, Amazon and Apple have
also in the recent past split their shares
to make them more affordable.
While stock splits make shares
cheaper for employees and investors,
some brokerages already allow cus-
tomers to buy fractions of individual
shares, making the benefit of stock
splits less pronounced than in the past.
In the filing, the company wrote of
the proposed stock split: “Our success
depends on attracting and retaining
excellent talent,” and that highly com-
petitive compensation packages, offer-
ing every employee an option to receive
equity, helped Tesla to do that. “We
believe the stock split would help reset
the market price of our common stock
so that our employees will have more
flexibility in managing their equity.”
Robert Miller