Stelios starts easyJet rival

 
Kasmira Jefford
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EASYJET founder Sir Stelios Haji-Ioannou has told the airline he is planning to launch a rival airline called Fastjet, in the latest twist in a series of bitter disputes between the tycoon and the firm he set up 16 years ago.

The shock move comes just a week after easyJet’s management promised to pay out a special dividend of £190m to shareholders, including Sir Stelios and his family, who own a 38 per cent stake in the budget airline.

In turn, Sir Stelios backed down on demands for an extraordinary shareholder meeting to force non-executive Professor Rigas Doganis off the board.

In a statement yesterday easyJet said its founder had already set up a website, which currently reads only: “Fastjet.com by Stelios. Coming soon!” The bold red background echoes easyJet’s own orange branding. A spokesperson for Sir Stelios declined to comment further on the launch.

EasyJet vowed to “take necessary action” if Fastjet infringes on the rights of the airline and its investors.

Sir Stelios also alleges that the company breached the terms of a “comfort letter” dated October last year – making it void, a claim which easyJet says it “emphatically rejects”.

The letter – which prevents him from setting up a rival airline – included a “mutual respect” clause that prevents Sir Stelios and easyJet from speaking negatively of each other.

In a statement yesterday, Sir Stelios said he “strongly believes that the directors of easyJet, via a smear campaign conducted by off the record briefings to journalists, have repeatedly breached the clause.”

Analysts have derided Sir Stelios’s latest actions, warning that it could damage shareholder confidence in easyJet if the airline became further embroiled in disputes with Sir Stelios.

One analyst said “the world has moved on since the time since he launched easyJet” when there was a greater gap between low budget airlines and legacy carriers.

Carolyn McCall took over the reins at easyJet a year ago with the challenge of finding some middle ground in the battle with Sir Stelios’s easyGroup. A two-year row over the licensing of the brand was resolved last October, when easyJet increased annual royalty payouts to easyGroup.it paid to easyGroup.

Under the agreement, easyJet said Sir Stelios agreed not to use his own name or a derivation of it to brand any other airline within Europe for five years.