TWO of Britain’s top business knights, Sir Mike Rake and Sir Roy Gardner, have emerged as the leading contenders to be the new chairman of Easyjet.

Each has been sounded out about the job in recent weeks, although the talks are still at an early stage. Neither has yet met Andrew Harrison, the budget airline’s chief executive, although the pair are thought to be acceptable to him – and to Sir Stelios Haji-Ioannou, Easyjet’s founder and leading shareholder.

The new chairman will replace another business knight, Sir Colin Chandler, who has served as chairman for nearly seven years. Chandler is expected to confirm at the airline’s annual meeting this week that he will step down later this year.

Rake, who rose to prominence running accountancy group KPMG, is the chairman of BT. Gardner, a veteran of British boardrooms, is chairman of Compass, the FTSE 100 catering group. A third candidate is also thought to be in the wings. Mike Turner, former chief executive of BAE Systems and now chairman of Babcock International, was also interviewed in the earlier stages of the search.

Thursday’s annual meeting, which will be held at the airline’s Luton airport headquarters, is likely to showcase what will be the main issue for the new chairman, the conflict between Haji-Ioannou and his fellow directors – and the management – over the company’s rate of growth. Haji-Ioannou has said he fears the company is expanding too quickly in the face of gathering recession.

He has dropped demands for the company to start paying dividends, but, thanks to an agreement struck when the company was floated, retains the right to become chairman or appoint more nonexecutive directors.

The row appeared to have died down since Christmas, with Easyjet reporting decent traffic and earnings figures. But Haji-Ioannou returned to the fray last week. At the economic summit in Davos, Switzerland, he told Reuters: “It’s always dangerous to drive a car by looking at the rear-view mirror. We’re looking at the quarter ended December and that’s history – revenue went well but it’s a different environment now.”

His comments are understood to have infuriated Easyjet executives.

Sources close to Haji-Ioannou said he had no plans for fireworks at the meeting, but would answer questions put by shareholders if allowed to by Chandler, who will chair the meeting.

Recession is hitting UK airlines hard. British Airways, which warned about profits last week, is expected on Friday to reveal that it lost around £50m in the third quarter of the financial year.

Pilots at BMI British Midland, the UK’s second-largest airline, will announce a ballot tomorrow for a vote of no-confidence in the company’s management following the last-minute imposition of a wage freeze last week. Balpa, the pilots’ union, is consulting its lawyers after an agreed pay rise was withdrawn at the last minute.

Airlines have protested to the Competition Commission about the removal of Hochtief, the German airports group, from the bidding for Gatwick airport. Hochtief was told by airports group BAA that it was out of the race last week as its bid did not comply with the requirements for the auction.

Sources at Virgin Atlantic and Easyjet, two of Gatwick’s biggest users, said they had been impressed with Hochtief’s plans and wanted it back in the race.

BAA, meanwhile, yesterday rejected suggestions it may agree to the commission’s demand that it also sell Stansted, the Essex airport.

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