Sir Stelios Haji-Ioannou Demands Fastjet Directors be Sacked

[Phone Wind]

Sir Stelios Haji-Ioannou has used his position as a major shareholder of African budget carrier Fastjet to demand that its directors be sacked.

Haji-Ioannou, who has also been a longstanding critic of management at the EasyJet airline he founded, called a general meeting to immediately dismiss Fastjet’s chief executive, Ed Winter, and remove another director, Krista Bates, from the main board, citing concerns over costs.

Winter last month announced he would step down as chief executive, pending a successor being found, but a spokesman for Haji-Ioannou, who owns a 12% stake and helped set up the Tanzania-based airline, said it was time for a “clean break”.

In a letter to Fastjet’s chairman, the EasyGroup boss claimed: “The company has a ridiculously high cost base ... Winter has burnt some £80m in the last 3 years. We believe the company will run out of cash sometime in 2016. We now have about six months left to steady this ship. Time is of the essence.”

Haji-Ioannou has balked at costs including a Fastjet head office at London Gatwick. He said: “This is not only a high cost location, when revenues are reported in local Tanzanian currency, but is also 4,750 miles away from Tanzania where the main operations and customers of Fastjet are located.”

He added that Fastjet was making unrealistic revenue forecasts for a fleet of six aircraft.

Sir Stelios Demands Fastjet directors be Sacked (http://www.theguardian.com/business/2016/feb/29/sir-stelios-calls-fastjet-directors-sacking-african-budget-airline)

[cavortingcheetah]

Krista Bates, General Counsel

Krista Bates joined as General Counsel for the fastjet group. Krista has contributed significantly to fastjet’s development as a professional adviser, having advised the Company on commercial and legal matters in east Africa and the UK since its re-admission. Prior to joining fastjet, Krista Bates pursued a career as a corporate lawyer, having trained and qualified with Simmons & Simmons in London in 2001. She subsequently practiced with Linklaters in the London corporate group, Clyde & Co LLP (formerly Shadbolt) in London and Tanzania, and Anjarwalla & Khanna in Kenya. Krista has advised a diverse base of private and listed national and international clients, and in recent years has focused on investments across eastern Africa. She is a member of the England & Wales Law Society.
Krista Lynn Bates
Solicitor - non-practising Admitted as a solicitor 03/09/01

Partner at:
Anjarwalla & Khanna Advocates
Aln House, Eldama Ravine Gardens, Po Box 200-00606, Safari Centre, Nairobi, Kenya
Tel:
20 374 8089
Anjarwalla & Khanna Advocates

Type:Not an SRA-regulated law practiceSRA ID:564166Tel:20 374 8089
Head officeAddress: Aln House,
Eldama Ravine Gardens,
Po Box 200-00606,
Safari Centre,
Nairobi,
Kenya
3 people at this branch of Anjarwalla & Khanna Advocates with area of practice: Banking
Asha- Sabrina Ayub
Solicitor Admitted as a solicitor 01/09/10

Associate at:
Anjarwalla & Khanna Advocates
Aln House, Eldama Ravine Gardens, Po Box 200-00606, Safari Centre, Nairobi, Kenya
Krista Lynn Bates
Solicitor - non-practising Admitted as a solicitor 03/09/01

Partner at:
Anjarwalla & Khanna Advocates
Aln House, Eldama Ravine Gardens, Po Box 200-00606, Safari Centre, Nairobi, Kenya


Oh....and some more......


City lawyer 'lost her £200,000 job after exposing corruption' - Telegraph (http://www.telegraph.co.uk/finance/jobs/9312372/City-lawyer-lost-her-200000-job-after-exposing-corruption.html)


Clydes settles whistleblowing dispute | News | Law Society Gazette (http://www.lawgazette.co.uk/law/clydes-settles-whistleblowing-dispute/5042620.fullarticle)
And so on and on one supposes.....

[Vc10Tail]

Does that include the DFO Tz?

[Phone Wind]

Ed Winter is leaving Fastjet today, less than a month after EasyJet founder Stelios Haji-Ioannou called for his dismissal

African budget airline Fastjet has said its chief executive is to step down this week, less than a month after its second-largest shareholder Stelios Haji-Ioannou called for his dismissal.

The easyJet founder, who owns a 12% stake in the company through a private investment vehicle, called in February for a general meeting to dismiss Ed Winter immediately. Winter is due to step down on Friday 18 March.

Haji-Ioannou had also called for the removal of general counsel Krista Bates and the appointment of non-executive chairman Colin Child to an executive position.

He said Winter had created significant overheads for the company, resulting in a high-cost base.

Fastjet said Bates would step down immediately and that Child would be appointed executive chairman until a new chief executive is appointed. The company declined to comment further.

[Phone Wind]

I see that Ed Winter was still in denial on his final day with Fastjet.

He blamed the currency devaluation, the election in Tanzania, the change in government and policies and the slowing of the local economies. The fact is he misread the market and made some catastrophic strategic errors. Under his leadership the airline has so far swallowed $250 million with still no signs of turning a profit on the horizon.

Ed chose to expand the fleet by an additional two aircraft just after the African currencies were at their weakest last year, despite knowing that a third aircraft leased earlier in the year had still not been utilised. It hasn't yet been shown that with low fares you can stimulate the market as has been the case in Europe, probably because the 2 markets are entirely different. AFAIK the airline's overall load factor has been only around 60% and it's been as low as 10% on some routes. I personally think Ed Winter has misled investors and has completely failed to manage costs. I have a couple of friends working for Fastjet and they're seriously worried about their job security at the moment as well as having little respect for, or faith in, the expatriate managers.

What has Jimmy Kibati added since his employment? He had a good career with Kenya Airways, but seems to have achieved little since joining FJET. Last year in an interview with Business and Tech in Kenya he said
You must have a smart management team

You got to have a management team with people who are smart and who know what they do. They should be proper leaders who know how to guide the ship even in stormy waters.

Most of the time when you see the airlines collapsing, it is when the ship get into stormy waters and everyone becomes confused, steering it this and that way, and the ship loses guidance.

You need people who are stable and steady and know how to guide the ship during the stormy waters. I have found that to be the biggest challenge for start ups that have come around.
I don't see much sign of that in Fastjet and I fear it'll take very optimistic investors with very deep pockets to keep the airline going.

It's not the fault of the employees, just poor management :ugh:

[Phone Wind]

I doubt anything will happen - either more suckers will invest and keep the company staggering on or it will go down the toilet, unless Stelios Haji-Ioannou has any influence on the appointment of new senior management.

What should happen is that they cut their cloth according to their cloth. Just one small example - Coastal Aviation crews live in perfectly acceptable accommodation, close to work in Tabata, whilst Fastjet crews live in very expensive accommodation moles from work in Mikocheni. Just one small example, but the sort of thing that helps make the company's overheads so much more than those of its competitors. There are many more small things all of which add up to one large over-expenditure.

[migair54]

It does not look good, the last routes they have opened are not performing, JRO was a disaster, it lasted few days only, NBO very low loads, ZNZ 50-60 pax and that's combine between DAR and JNB pax.

I flew to JNB in Feb and we were like 50 on board, that's ZNZ and DAR pax to JNB, from JNB back to Dar 67 only.

What about all the taxes they have to pay?? Did they pay that already to the government? ?

The issue with the pilot's in Mikocheni is just another nail in the coffin, very expensive operation with so many expat conmuting, I see different pilots almost every month.

[Phone Wind]

Fastjet shares have already dropped by 55% in 2016 and now the company is embroiled in another disagreement with Stelios Haji-Ioannou.

Stelios Haji-Ioannou, owner of easyGroup Holdings Ltd, said in a letter to the board of Fastjet Plc (FJET.L) that the African budget airline was in breach of two clauses of a license agreement.

Haji-Ioannou, who has been vocal in his opposition of Fastjet's management, said the carrier's Chairman Colin Child had caused the company to be in material breach of the license agreement with easyGroup, which owns the Fastjet brand.

Haji-Ioannou said Fastjet was in breach of two clauses of the agreement, and that it had failed to inform easyGroup about Fastjet's new "accountable manager" after the exit of former Chief Executive Ed Winter.

Fastjet declined to comment on the matter. It had said last week that it was taking legal advice on another letter from Haji-Ioannou

Haji-Ioannou, who owns a 12.6 percent stake in Fastjet through easyGroup, said in that letter that the carrier could go insolvent.

Fastjet may survive, but I don't believe that it will be in its present form if it does.The company is saying nothing to dispel the fears of investors and seems very lacking in transparency. I think there may be a place for a company with the Easyjet business model in the East African market, but now may not be the time and the overspending by management doesn't help

[The Puzzler]

How many airlines can you cite that have a bloated management structure on one continent (Europe) and run an airline on another continent (Africa)? The concept of an LCC in Africa and Fastjet is good, but the way it has been run is completely wrong. As usual, Stelios is absolutely right, the management needs to be based in Tanzania, on salaries commensurate with the local market and the financial position the airline is in. I have never seen so many management personnel running an airline with so few aeroplanes. I fear the money will run out before a profit is ever turned. A real shame.....

[Wageslave]

I'm afraid that no amount of management (within reason) are going to make much of a difference to the bottom line when leasing airframes and paying all the other overheads of an airline.

The sad fact seems to be that E Africa may not yet be in the mindset of cheap air travel and clearly not enough people are buying tickets. The concept of air travel is still exotic to the average citizen of these countries where even a cheap fare is a large part of monthly income and the pressing "need" of Westerners to forever be somewhere 500 or 1000 miles just hasn't infected them yet. Populations in some of the cities may be large but the affluence level is still very low by European standards and affluence in the countryside is largely zip.

Those routes must be very, very thin by any standards and I question whether the African "affluent class" is sufficiently large to support them.

Their time will come, just not sure it has arrived yet.

[Phone Wind]

E Mail Stelios to Fastjet Board (http://easytaxis.com/pdf/2016-03-22-easygroup-to-fastjet-notice-of-breach.pdf)

It seems that Fastjet are trying to hide something from Easyjet in refusing to divulge passenger loads or revenues, but all will eventually have tp be revealed.

With KQ confirming that it will shed up to 15% of its workforce to make itself economically viable and quite frequently offering cheaper fares on the DAR - JNB and LUN - JNB routes these days, Fastjet is starting to look even less likely to turn the business around.

[Wageslave]

Raski, if that was a reply to my post could you re-write it in a way that we can understand? As written it is completely meaningless.

[Phone Wind]

Colin Child is a non-executive director of the Connect Group of companies (media distribution, educational supplies and parcel freight delivery). Their annual reports have been available for some months, as have those of Easyjet. But the board of directors of Fastjet have still not published their 2015 figures. I can see no valid reason for this other than to keep shareholders in the dark. This total lack of transparency is not a good sign and it seems to me that Colin Child is not doing any better than Ed Winter.
The only good sign (possibly) is that there has been no more news from Stelios - or maybe that's just the calm before the storm?
I should add that I have an interest in this because I have (very few) shares in FJET.

[Phone Wind]

FJET shares continue to stagnate and the company has still not published passenger load figures or accounts for 2015. However, 2 days ago the company published an update on its application for a Zambian AOC

fastjet (AIM: FJET), today provides an update on its application for a Zambian Air Operator Certificate ("AOC").

Further to the trading and operational update in March 2016, and as part of the Company's rationalisation of its routes to match current demand with capacity, fastjet has decided to delay its application for a Zambian AOC, to Q4 2016 pending further review of the network.

fastjet Tanzania will continue to operate international services three times a week between Dar es Salaam and Lusaka on the circular route Dar es Salaam/Lusaka/Harare/Dar es Salaam.

ENDS



For more information, contact:



fastjet Plc

Tel: +44 (0) 20 3651 6307

Colin Child, Executive Chairman

Lisa Mitchell, Chief Financial Officer

So despite being responsible for this saga Ed Winter escaped with all his remuneration :yuk:

Quite a number of local staff in Tanzania are being laid off in circumstances which would be totally unacceptable if they were employed in a country with better employee protection laws.:yuk:

[Phone Wind]

From the Annual Report 2014 (they still haven't published one for 2015 :ugh:
Fastjet Financial Report 2014 (http://www.fastjet.com/img/stand_alone_files/file/original/236678-fastjet-85.pdf)

Richard Bodin CCO and COO Fastjet, total remuneration $512,000 pa.

Colin Child, CEO has a great history of success:
Child’s last posting was as chief finance officer at banknote printer De La Rue, but he left in January after the company’s share price halved during his tenure amid a string of profit warnings.

He held the same position before that at commercial property agent DTZ, but departed after its share price tanked 98 per cent.

I fear bespectacled beancounter Colin might not be a man with whom to go tiger shooting.

Nick Cane was only appointed a director on 18th September 2014 and his remuneration for a period of 3 1/2 months was $263k and Krista Bates appointed a director on 1st June 2014 had a remuneration package of $318k.

Angus Saunders, who resigned from the company in the first week of July 2014 had a remuneration package that year of $377k.

All, of this for a bunch of expats based in Gatwick running a loss-making 'airline' with just 3 A319s in Africa. People wonder why the company is losing money. They still haven't published a financial report for 2015 or released their passenger numbers for 2016 so far :(

[The Puzzler]

All, of this for a bunch of expats based in Gatwick running a loss-making 'airline' with just 3 A319s in Africa. People wonder why the company is losing money.

You've hit the nail on the head Phone Wind, there's nothing to wonder....:sad:

[Phone Wind]

The company seems to have been set up purely to allow a few individuals in UK to each take a few hundred thousand dollars of investors' money and then walk out leaving themselves richer and the company poorer :mad:

[Young777]

whats happening with expansion plans? seemed to be going well but suddenly hit a roadblock

[Yeah]

They are shrinking instead of expanding. Fastjet is coming back to 3 planes operations now. :sad:

[insert_name]

I was invited to interview a few months ago for an urgent requirement, but then.......sorry we are on hold UFN. Plus it was pay your own way to London to interview for an African base. Hmmmm

[hunterboy]

As someone that had dealings with E.W when he was in British Airways, I was astonished that anyone employed him at all. He wasn't known as Thick Ed for nothing. Just goes to show how far bluster and bull**** can take you.

[SAFARI Fire Fighter]

Had same experience as insert name...... except i already had visa and ticket so went on holiday instead..... once bitten, twice shy, and i see they still "recruiting" on the website

[Bigpants]

Radical rescue plan. Sir Stelios should be talking to Tehran about moving the whole Fastjet operation to Iran. 5 A319s could quickly be used on internal and medium range routes in and around Iran.

[Phone Wind]

Easy Jet holdings, who own 12.6% of the holdings of Fastjet have requested an general meeting. The meeting has been sought to propose a resolution to remove Colin Child as a director and from the board of the Company with immediate effect.

Obviously Stelios is unhappy that Colin Child has still not appointed a new CEO and the company has not yet published its financial results for last year. Rumors are that remaining operating capital is down to less than $19 million

[Phone Wind]

Fastjet share price nosedives after EasyGroup boss Sir Stelios Haji-Ioannou slams airline for reporting 2015 results "two months late" | City A.M. (http://www.cityam.com/242476/easygroup-boss-sir-stelios-haji-ioannou-slams-fastjet-for-reporting-2015-results-two-months-late-?)

[Phone Wind]

Stelios in new row with Fastjet after troubled airline warns it will need more cash to survive if it misses financial targets | This is Money (http://www.thisismoney.co.uk/money/markets/article-3622345/Stelios-new-row-Fastjet-troubled-airline-warns-need-cash-survive-misses-financial-targets.html)

[Yeah]

Any link to financial report?

[Phone Wind]

Final Results - Fastjet Regulatory News (RNS) - London South East (http://www.lse.co.uk/share-regulatory-news.asp?shareprice=FJET&ArticleCode=178a4529&ArticleHeadline=Final_Results)

[polax52]

I believe it's a certainty that they will need another Rights Issue to raise funds to keep this company going. I would say that it is very questionable whether investors would be interested in putting more money into this company.

[Phone Wind]

Nico Bezuidenhout takes off from Mango for Fastjet | Transport & Tourism | BDlive (http://www.bdlive.co.za/business/transport/2016/06/09/nico-bezuidenhout-takes-off-from-mango-for-fastjet)
At last! I think Fastjet will very much benefit from the appointment of Nico as CEO. He did a great job at Mango and knows the African market. I expect to see the company HQ move from Gatwick to Dar and quite a few changes in management. He will have an uphill struggle to turn the company's finances around, but his appointment will inspire investor confidence.
This is very bad news for Mango

[polax52]

I think that survival depends on the raising of more cash through a rights issue. If that is successful then Fastjet could be a worthwhile investment. It still has a big question mark hanging over it though.

[Phone Wind]

polax,
I think you're right. The share price is up 13.5% at £0.335 at present, but that will no doubt be much diluted if there's a rights issue.
Sir Stelios is still not happy though as he says that Nico had already been spotted on a list of possible candidates put forward by a head hunter he hired last November. He accused Colin Child of procrastinating and said he doesn't think he's fit to be Chairman. So the EGM is still going to be held.
Fastjet names new boss following Stelios rebellion (http://www.telegraph.co.uk/business/2016/06/09/fastjet-names-new-boss-after-stelios-rebellion/)

[Phone Wind]

Sir Stelios Haji-Ioannou urges Fastjet shareholders to vote to remove chairman Colin Child | City A.M. (http://www.cityam.com/243179/sir-stelios-haji-ioannou-urges-fastjet-shareholders-to-vote-to-remove-chairman-colin-child)

It looks as if Stelios is stepping up his war on Colin Child. The General Meeting at Gatwick in 2 weeks should be interesting.

SAA also seem to be engaged in their own dirty tricks war against Nico Bezuidenhout, having yet again pointed out that he does not have the educational qualifications originally claimed (he doesn't have a degree or an MBA), and that Mango financially benefitted from all its aircraft being sub-leased from SAA at preferential rates.

There's more going on behind the scenes than we'll ever know

[ian16th]

Fastjet?s new CEO mulls smaller planes to revive African airline | Fin24 (http://www.fin24.com/Companies/Industrial/fastjets-new-ceo-mulls-smaller-planes-to-revive-african-airline-20160616)

HQ to move to Africa and a/c sizes to be reviewed, down to RJ's.

[Trim Stab]

HQ to move to Africa

That'll kill it off then...

[Phone Wind]

At Fastjet's AGM and GM in Gatwick yesterday, the institutional shareholders (mainly M&G) decided to keep Colin Childs on. Sir Stelios said that he was happy with that as it now leaves M&Gs Tom Dobell and Colin Child to clear up the mess.

However, the (wholly expected) announcement that there would be a new rights issue (having just burned through almost £50 million in the last 15 months) has further depressed the share price to 24p.

Fastjet to raise more funds as cash dwindles (http://www.telegraph.co.uk/business/2016/06/28/fastjet-to-raise-more-funds-as-cash-dwindles/)