Stelios claims victory in easyJet row on growth but holders rebel against him

Easyjet founder Stelios Haji-Ioannou is claiming victory in his row with the airline's management after the board said today it was prepared to pare back its expansion plans.

But the public row has lost Stelios fans among easyJet's institutional shareholders: in the vote to re-elect Stelios as a non-executive director more than a fifth of the shares cast refused to back him.

The board today bowed to pressure from 41%-shareholder Stelios by saying it could scrap plans to grow its fleet by 20% over the next three years.

With latest statistics revealing easyJet's current passenger growth has all but ground to a halt - January numbers plunged to a low of growth of 2.8% - chairman Sir Colin Chandler indicated plans to add 30 aircraft to take its fleet size to 197 by 2011, could be shelved.

In recent months Stelios has said the management's growth plans are imprudent but as recently as a fortnight ago, at its quarterly results, directors were sticking to their fleet expansion plans.

The row has seen Stelios refuse to sign off the company's report and accounts, stating easyJet is a maturing airline which should start conserving cash and think about paying its shareholders a dividend.

He ratcheted up the pressure, threatening to exercise his rights to become the airline's chairman again and place his representatives on the board.

Speaking at the annual meeting today, Chandler said: "In light of the current economic environment the board will continue to adopt a cautious approach to growth and will focus on maintaining a strong balance sheet.

"The board will continue to monitor capital expenditure plans and conserve the company's cash. Fleet planning decisions will be made by the board prudently, on the basis of the trading outlook.

"Naturally, this fleet plan for 2010 of 185 aircraft and 2011 of 197 aircraft may change if the macro-environment worsens in the next three to six months and given the lead-time for building aircraft."

Votes cast revealed a sizeable revolt against Stelios's interventions. Shareholders speaking for 32 million shares abstained on his re-election vote, indicating more than one of the major shareholders led by Standard Life, Schroders, Fidelity and Marshall Wace revolted.