EasyJet founder plans to launch rival airline, Fastjet
The entrepreneur behind easyJet, Sir Stelios Haji-Ioannou, has threatened to take on the budget airline by launching his own airline, Fastjet. The news comes after Haji-Ioannou accused the easyJet management of running a smear campaign against him.
Haji-Ioannou has had a turbulent and controversial relationship with easyJet ever since he stepped down as chairman in 2002, despite being a major shareholder in the company. It was thought that some of the animosity between Haji-Ioannou and easyJet was resolved in a deal struck in October 2010, specifically stating that Haji-Ioannou would not set up a rival airline.
However, it seems that Haji-Ioannou reneged on the agreement by looking to set up Fastjet. He has already set up a website with the URL fastjet.com, which currently has a holding page stating: “Fastjet.com by Stelios. Coming soon!” The holding page, white text on a vivid red background, is much like easyJet’s own bright branding.
Haji-Ioannou declined to give more details of the launch, saying only that he will not now abide by the terms of last October's agreement.
Sir Stelios Haji-Ioannou said in a statement: “Sir Stelios strongly believes that the directors of easyJet, via a smear campaign conducted by off-the-record briefings to journalists, have repeatedly breached the clause, so he has terminated the effect of the letter for repudiatory breach and has rejected all payments offered under this letter since May 2011."
EasyJet said that it would "take necessary action to protect the rights of easyJet and the interests of its shareholders". In a statement, easyJet added: "Sir Stelios also alleges that easyJet has breached the terms of the binding comfort letter between him and easyJet of 10 October 2010 and that that letter is no longer in force, claims which easyJet emphatically rejects. EasyJet continues to seek constructive dialogue with easyGroup and Sir Stelios."
Under the terms of the October 2010 deal, Haji-Ioannou separately agreed "not to use his own name or a derivation of it to brand any other airline which flies to or from any country in Europe for a period of five years".
Nor is he allowed to hold a stake larger than 10% in another European airline. He receives £300,000 a year in return for those commitments.
Both of these clauses will be broken if Haji-Ioannou goes ahead in setting up Fastjet, undoubtedly creating a full-blown bitter rivalry between the two airlines, and most likely legal repercussions.
What do you think of the news? Would you welcome another budget airline or do you think there are too many already? All comments below.
Quotes taken from The Guardian.