STELIOS Haji-Ioannou, founder and chairman of no-frills airline easyJet, is stepping down.

The airline said yesterday that Mr Haji-Ioannou would resign as chairman next year.

Mr Haji-Ioannou said he would retain a significant stake in easyJet for a long time, but added: "Starting a company requires a very different skills set to those needed to chair a major plc and I consider my strengths are in the former - I am a serial entrepreneur.

"The history of the City is littered with entrepreneurs who hold on to their creations for too long, failing to recognise the changing needs of the company, its business and its shareholders."

Mr Haji-Ioannou said institutional investors had expressed concern about his role and this had played a part in his decision to quit.

He will be replaced by Sir Colin Chandler, 62, currently chairman of Rolls-Royce subsidiary Vickers Defence Systems, which builds tanks at a plant in Scotswood Road, Newcastle, and deputy chairman of engineering group Smiths.

Mr Haji-Ioannou, who said he was delighted Sir Colin was joining the board, founded easyJet in November 1995 and has gone on to start a range of ventures under the "easy" brand, including an Internet cafe and car rental business.

The airline joined the London Stock Exchange in 2000.

Sir Colin joins easyJet as deputy chairman, and will take over at next year's annual meeting.

The entrepreneur said he was "delighted" Sir Colin was joining the board.

"It is a sign of maturity in a young company to have a chairman who is independent from the controlling shareholders."