Fastjet Plc denied allegations made by shareholder Stelios Haji-Ioannou that the African budget airline had breached its brand licence deal with his easyGroup Holdings Ltd.
Fastjet, responding to a letter from Haji-Ioannou made public last week, said it had sought legal advice and that it did not believe it was in breach of the agreement.
Haji-Ioannou, best known as the founder of Europe’s easyJet Plc, has over the past few months criticised Fastjet for having a high cost base which, he said, had jeopardised the company’s ability to stay solvent. He has also threatened to take back the brand.
Fastjet earlier this month announced the departure of Chief Executive Ed Winter, bowing to pressure from EasyGroup, its second-largest shareholder with a 12.6 percent stake.
Launched in 2012, Fastjet offers “no frills” flights to undercut larger carriers, seeking to copy the model pioneered by easyJet and Ryanair Holdings Plc.
However, the airline has struggled in the face of tough conditions in Tanzania, its home market where most of its fleet is deployed.
It warned earlier this month that its full-year results would be well below market expectations and that it no longer expected to be cash flow positive in 2016.
Fastjet did not detail its argument against Haji-Ioannou’s allegations of a license breach on Wednesday.
A spokesman for Haji-Ioannou declined to comment.
(Reporting by Esha Vaish in Bengaluru; Editing by Saumyadeb Chakrabarty and Anupama Dwivedi)
Reuters
Fastjet Plc denied allegations made by shareholder Stelios Haji-Ioannou that the African budget airline had breached its brand licence deal with his easyGroup Holdings Ltd.
Fastjet, responding to a letter from Haji-Ioannou made public last week, said it had sought legal advice and that it did not believe it was in breach of the agreement.
Haji-Ioannou, best known as the founder of Europe’s easyJet Plc, has over the past few months criticised Fastjet for having a high cost base which, he said, had jeopardised the company’s ability to stay solvent. He has also threatened to take back the brand.
Fastjet earlier this month announced the departure of Chief Executive Ed Winter, bowing to pressure from EasyGroup, its second-largest shareholder with a 12.6 percent stake.
Launched in 2012, Fastjet offers “no frills” flights to undercut larger carriers, seeking to copy the model pioneered by easyJet and Ryanair Holdings Plc.
However, the airline has struggled in the face of tough conditions in Tanzania, its home market where most of its fleet is deployed.
It warned earlier this month that its full-year results would be well below market expectations and that it no longer expected to be cash flow positive in 2016.
Fastjet did not detail its argument against Haji-Ioannou’s allegations of a license breach on Wednesday.
A spokesman for Haji-Ioannou declined to comment.
(Reporting by Esha Vaish in Bengaluru; Editing by Saumyadeb Chakrabarty and Anupama Dwivedi)
Reuters
