EasyJet to launch 27 millionaires

MORE than two dozen top managers at Go will become millionaires when rival easyJet buys the no-frills airline for just over £400m. The sale is expected to be announced on Monday - assuming there are no last-minute hitches in the acrimonious negotiations.

The 27 senior managers at Go will share about £60m, according to sources close to the talks. The deal is expected to go ahead despite opposition from Go's chief executive, Barbara Cassani.

She claims that her management team, who between them speak for 22.5% of the airline, still back her strategy of pursuing a stock market flotation for Go. This is disputed by easyJet chief executive Ray Webster, who insists that some Go managers are keen to work for an enlarged airline.

Cassani has also become embroiled in a bitter personal row with easyJet's founder, Stelios Haji-Ioannou. He claimed to have offered her the role of Webster's deputy at the enlarged airline with a promise of taking over in two years' time, when Webster retires.

Haji-Ioannou rubbed salt in the wound by insisting that Cassani was allowing 'emotion and ego' to cloud her judgment.

In an extraordinary move, Cassani, who stands to make about £20m out of the takeover, issued a formal statement saying that she 'has never been offered a role', does not want one and will quit if the deal goes ahead. The management team was 100% behind her, she added.

Cassani is also furious with Go's majority shareholder 3i for agreeing to sell to easyJet. The venture capital group backed her in a £100 million management buyout of Go from British Airways last year.

But 3i, which owns 67% of Go and stands to make a huge return from its investment, has been accused of acting like a 'quick flip merchant' in aiming to cash in so quickly.

This was denied by 3i. 'We would look damned stupid if we turned down this deal and a year later the flotation bombed,' said a 3i spokesman. 'The shareholders would kill us.'

But a senior 3i source admitted that the company normally paid close attention to its managers' views and, as a rule, went along with them. Go has recovered well since 11 September. It carried nearly half a million passengers in March, compared with 310,300 in January.

Some analysts have questioned whether the merger means that budget carriers harbour doubts about their scope for strong organic growth. But Haji-Ioannou has insisted that easyJet's promise of 35% organic growth is safe.

'Buying Go will produce a 100% step-change in growth by bringing expansion more quickly and smoothly,' he said.

Last week he said Cassani would not be allowed to stand in the way of a deal. 'No company is ever a one-man or one-woman show,' he said.