It is not the first time that the billionaire baron of budget carriers has called for the head of the chief executive of an airline. This time, however, rather than ejections at easyJet, Sir Stelios Haji-Ioannou is demanding the removal of directors at Fastjet, his African adventure.
Sir Stelios was in at the ground floor when the AIM-quoted Fastjet was launched a little over four years ago. The aim was to create an easyJet for Africa, replicating the success of the Greek-Cypriot’s European carrier.
However, having stumped up a further £10 million in the latest fundraising last year, which took his Fastjet stake to 12 per cent, Sir Stelios fears that the airline is within months of going bust and has called for the immediate departure of Ed Winter, the chief executive.
Having privately been under pressure from Sir Stelios for months, Mr Winter, a former lieutenant in their days together at easyJet, has said previously that he wants to leave Fastjet.
Sir Stelios is also demanding the removal of Krista Bates, the carrier’s general counsel. The former City lawyer joined Fastjet after the private settlement of a £200,000 wrongful dismissal claim against her firm Clyde & Co. The case concerned claims of corruption in Tanzania, wholly unrelated to Fastjet, which coincidentally bases its aircraft in Tanzania.
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In a statement calling for the convening of a general meeting to remove the directors, Sir Stelios said that Fastjet’s overheads far exceeded what a six-aircraft airline could sustain. He said that Mr Winter’s “ridiculously high cost base” at the company’s Gatwick headquarters “near his home [and] 4,750 miles from Tanzania” had meant that the chief executive had “burnt some £80 million in the last three years”.
Sir Stelios continued: “At the current cash burn rate, we believe the company will run out of cash some time in 2016. We now have about six months left to steady this ship.”
He also dismissed as “a pipe dream” forecasts recently made by Liberum Capital, its house broker, that Fastjet would break even this year, trebling revenues to £186 million.
Sir Stelios wants Colin Child, the part-time chairman, to take over as executive chairman. Mr Child, who arrived in October, has no previous airline experience.
A Fastjet spokesman declined to comment on whether Mr Child would take on the role or whether a special general meeting would be called.
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Shares in Fastjet closed flat at 67¼p.