FastJet slams EasyJet founder Stelios for going public, is "taking legal advice" over letter about contractual relationship

 
Catherine Neilan
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(FILES) Picture taken in London on Novem
Stelios: FastJet is not happy (Source: Getty)

African airline FastJet has slammed EasyJet founder Sir Stelios Haji-Ioanno for going public with a letter relating to the two business' contractual relationships.

The Tanzania-based firm is seeking legal advice, it said, over his "wholly inappropriate" actions.

Haji-Ioanna, who helped set up FastJet four years ago and through EasyJet owns 12.6 per cent in the business, has been campaigning for chief executive Ed Winter and another director, Krista Bates, since it warned it "no longer expects to be cash flow positive" for the year.

Fastjet's share price fell 36 per cent that day, as Haji-Ioanna called for an EGM saying he had "lost faith in the management and current board". It has since continued to fall and is now at a 52-week low.

FastJet FastJet | mobile image

Bates left shortly afterwards and Winter is expected to have left by the end of this week.

In a letter to Fastjet’s chairman, seen by the Guardian, the EasyGroup boss claimed: “The company has a ridiculously high-cost base... Winter has burnt some £80m in the last three years.

"We believe the company will run out of cash some time in 2016. We now have about six months left to steady this ship. Time is of the essence.”

Yesterday, the firm released another letter he had written to the chairman and the board of FastJet to demand that it resume the publication of monthly passenger statistics "as a matter of urgency". It also demanded updated cash flow forecasts for the current financial year.

The letter claimed that Fastjet had “potentially committed a breach of the current brand licence that exists between FastJet and EasyGroup Holdings”.

But today the board of FastJet said it "cannot understand why EasyGroup... has published this particular letter without first raising its concerns with the company".

"The board considers the publication of this letter as wholly inappropriate and is taking legal advice on the matter. The company holds EasyGroup responsible for any damage caused to the business by the publication of this letter."

Update: In response, Haji-Ioannou has said: “Potential breach of a brand licence agreement is a very serious legal matter. easyGroup is both well advised on this occasion and very experienced in handling brand licensees under the terms of their respective agreements. For example it should be remembered that easyJet is an easyGroup licensee.

“Colin Child should be taking proper legal advice with a view to complying with the agreement without trying to cover the matter in a veil of secrecy.

"As brand owners, easyGroup is concerned to protect brand customers as well as its reputation from any future damage. Other shareholders should be putting pressure on Colin Child to cut costs and resume publication of the passenger statistics.”

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