Stelios Haji-Ioannou's feud with fastjet plc has intensified following last week's pressured resignations of Fastjet's now former chief executive officer Ed Winter and general counsel, Krista Bates.
On Friday, March 18, fastjet plc said it was seeking legal advice after Haji-Ioannou's easyGroup Holdings published a confidential letter it sent the budget carrier regarding their contractual relationship.
In the letter, easyGroup Holdings outlined its concerns about Fastjet's future prospects given poor sample load factors on flights between Dar es Salaam and Nairobi Jomo Kenyatta as well as the LCC's own poor financial projections for the year ahead. It then demanded fastjet resume the publication of monthly passenger statistics and requested updated cash flow forecasts for the current financial year warning fastjet that failure to do so constituted a breach of their easyGroup franchise contract.
The LCC subsequently responded to the letter with outrage while warning there could be legal repercussions should its publication harm the company in any way: "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."
Haji-Ioannou then countered that fastjet was walking a fine-line in its dispute with easyGroup, which owns as 12.6% stake in the airline.
"Potential breach of a brand licence agreement is a very serious legal matter," he said. "easyGroup is both well advised on this occasion and very experienced in handling brand licensees under the terms of their respective agreements."
"Colin Child [fastjet's recently appointed Non-Executive Chairman] 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."
To add to the boardroom chaos, Tim Ingram on Friday, March 18, resigned from his position as easyGroup Holdings Ltd’s representative on fastjet's board. Though Ingram's reason for leaving has yet to be disclosed, he is seen as being instrumental in the removal of Winter and Bates.
