EASYJET's founder and largest shareholder Sir Stelios Haji-Ioannou has blasted the airline's calls for state aid, saying companies as big as Easyjet "do not deserve charitable gifts".

Instead, the carrier should look to raise cash through an equity raise, he said, saying government loans "would only postpone the problem, [they] do not cure it".

In a letter yesterday Haji-Ioannou also threatened to sack an Easyjet board member every seven weeks unless the firm cancels a £4.5bn order of new aircraft from manufacturing giant Airbus.

The letter to chairman John Barton came just as Easyjet announced it would ground its entire fleet for the foreseeable future due to coronavirus.

The airline warned there could be "no certainty" as to when flights would recommence.

Haji-Ioannou said that the order for 107 new planes from Airbus was "the main risk to the survival" of Easyjet.

He added that the "liability of paying Airbus £4.5bn dwarfs today's Easyjet market capitalisation of £2.4bn", and said the carrier should declare force majeure to get out of payment obligations.

In response, Easyjet's board issued a statement saying that it was "removing cost and non-critical expenditure from the business at every level". Easyjet shares fell 7.2 per cent to 552p on the news.

Haji-Ioannou's demands, which Easyjet chair John Barton has until tomorrow to reply to, come as the UK's airlines seek financial help from the government to survive.

However, Haji-Ioannou contradicted calls for state aid from chief executive Johan Lundgren, saying that if the Airbus payment is cancelled Easyjet will not need state aid. "It would be an abuse of taxpayers' money to obtain loans to pay Airbus for an unprofitable investment in 107 aircraft. We should raise equity," he said.

Chancellor Rishi Sunak warned airlines last week that financial assistance would only be forthcoming as "a last resort" after carriers had exhausted all other meanings of raising cash.

The decision was met with dismay by the airline sector at large, with industry bodies Airlines UK and the Airport Operators' Association writing to the chancellor to lay out their demands. Yesterday 38 MPs wrote to Sunak to add their voices to calls for industry-wide measures.

(c) 2020 City A.M., source Newspaper