EasyJet founder Sir Stelios gets his way as airline hikes dividend

EasyJet today whacked up its dividend to 50% of profits in a move seen as placating vocal founder and major shareholder Sir Stelios Haji-Ioannou.

But despite the move complying with his key demand for many years, the firm shrugged off suggestions it was bowing to his concerted campaign.

Europe’s second biggest budget airline said that it would raise its payout from 40% of the company’s post-tax earnings to reflect its confidence, even as it reported a larger than expected first half loss, due to falling consumer demand after recent terrorist attacks.

Sir Stelios, whose family still owns a third of the airline, called for the company to end its “scatter-gun approach” to dividends as recently as February.

But chief executive Dame Carolyn McCall said easyJet’s decision to lift the payout was the right thing to do now, five years after the airline began making dividend payments.

“Sir Stelios has been saying this for six years, so it’s not something he has just raised recently. We talk to all of our shareholders on a regular basis. We are very aware of their views.”

Andrew Findlay, chief financial officer, said: “Taking our special dividends and our ordinary dividends, we have been paying out 50% after tax anyway. So this regularises the situation and underlines our confidence in the business.”

Investors liked the move, sending the airline’s shares up more than 2% to 1502p, after gains of more than 3% on Monday.

There was also some relief that easyJet’s results were not worse. The airline warned in January that terrorist attacks were having an impact on consumer’s travel choices.

Total revenue for the company was up just 0.3% at £1.8 billion, but profits swung to a £24 million loss, compared with a £7 million profit last year.