Sir Stelios Haji-Ioannou has announced plans to set up an airline called Fastjet, which could potentially compete with the budget carrier he launched 16 years ago.
The entrepreneur has written to London Luton Airport-based easyJet to outline his plans for a new airline. Sir Stelios has already created a website for the carrier at www.fastjet.com, with the message: “Fastjet.com by Stelios. Coming soon!”.
EasyJet, which Sir Stelios and his family have a 38 per cent stake in, has had a series of disagreements with the billionaire in recent times. Last week easyJet agreed to pay £190m in dividends to shareholders, suggesting the differences between the two sides had been settled.
However, easyJet has pledged to take action against the tycoon if its rights and those of its shareholders are infringed upon. According to a statement from the carrier, Sir Stelios claims easyJet breached the terms of a “comfort letter” from October 2010, making the agreement null and void. But this accusation has been rejected by easyJet.
A statement released on the billionaire’s behalf said: “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.”
Sir Stelios was forbidden from becoming a significant shareholders in another airline or setting up a rival airline in the comfort letter, which also detailed a “mutual respect” clause to stop him speaking negatively about easyJet.
Constructive dialogue between Sir Stelios and easyGroup continues, according to easyJet.
At Monday’s closing share price, Sir Stelios and family have a combined stake of £550m in the airline. Other shareholders are reportedly calling for the entrepreneur to sell his stake immediately.
Airlines analyst at City broker Panmure Gordon, Gert Zonneveld, believes it will be difficult for Sir Stelios to recreate the success he had with easyJet with his new carrier.
Zonneveld said: “When easyJet and Ryanair were established the market was very different. Ticket sales went through travel agents, the whole concept was quite new. They developed new routes and created new demand. Any newcomer is going to struggle. The low-hanging fruit is gone.”