Nairobi, Kenya
February 7, 2013
Twist in Sh660m Fastjet-Fly540 wrangle as licence is withdrawn
In Summary
- The ownership dispute has stalled FastJets plans to enter the Kenyan market and revamp the Kenyan unit of Fly540.
The debt-ownership row between FastJet and Fly540 Kenya has taken a new turn after the latter withdrew its licence that allowed the London-based budget carrier to carry out business in Africa.
In a statement on Wednesday, Five Forty Aviation, which owns the Fly540 brand, said that FastJet subsidiaries across the region must repaint their aircraft and remove branded merchandise from sales offices after failing to comply with conditions stipulated in the licence agreement.
Five Forty Aviation had January 24 written to FastJet subsidiaries in Angola, Ghana and Tanzania giving them a seven day notice comply with the licence agreement, part of which include the payment of Sh669.9 million in licensing fees.
The subsidiaries allegedly failed to meet the Tuesday deadline following which Five Forty Aviation withdrew its license.
We had no choice but to take this action... we have not received safety reports for the past three months from FastJets Africa Operation, said Fly540 Kenya chief executive Don Smith.
In a rejoinder, FastJet issued a statement declaring that neither Mr Smith nor Five Forty Aviation has the power to withdraw the licences.
Five Forty Aviation is powerless to terminate purported brand licence agreements for any Fly540 operations... with regard to operations, it will have no impact on operations, Fastjet chairman David Lenigas said.
FastJet was set up last year after Lonrho Aviation transferred 49 per cent of its ownership in Fly540 to London-listed firm Rubicon.
The companys plan is to leverage on the Fly540 brand and market position in Kenya, Tanzania, Angola and Ghana to launch a budget carrier in Africa.
However, over the past few weeks, Fly540 Kenya has disputed the validity of the transaction, saying that Lonrho owed the company Sh591 million ($6.8 million).
The ownership dispute has stalled FastJets plans to enter the Kenyan market and revamp the Kenyan unit of Fly540.
Last week, the company signed a deal with Fly540 rival, Jetlink, that could give it an alternative route into the local market.
We feel that Jetlink, which already has IOSA (an international safety standard) accreditation, is a far better Kenyan partner for Fastjet, given our standards of safety, security and reliability, said FastJet yesterday.
The company has also stated that it will move against Fly540 Kenya chief executive Don Smith, to recover previously undisclosed historic debts that have come to light post acquisition.
The latest move by Mr Smith to go after FastJets business outside Kenya could further throw a wrench in the companys long-term plans.
Source:
Twist in Sh660m Fastjet-Fly540 wrangle as licence is withdrawn - Business_News - nation.co.ke
Imekula kwao watani wetu Kenya, sisi tutaendelea kuruka na FastJet katika anga yetu ya Tanzania
READ BELOW TO UNDERSTAND THE SAGA BETWEEN FASTJET AND FLY540
Additional info by Kichwat of JamiiForums qouted from Telegraph newspaper
Canada
-based Avmax Aircraft Leasing has written to FastJet saying it was removing the registration of three planes leased by its Tanzanian operation. The trio of aircraft, flying under the Fly540 brand, have allegedly run up unpaid leasing and maintenance bills of almost $2m (£1.3m).
The letter from Avmax vice-president Don Parkin, headed "Notice of De-Registration", notified "Fly540/Fastjet of its continuing default" under the lease terms.
It added: "As such, the lessor has elected to deregister the aircraft from the Tanzanian Civil Aviation Registry." The January letter said the deregistration would "be commenced immediately".
Mr Parkin's letter followed a warning in November that Fly540/FastJet was in default and continuing "to refuse and neglect your financial obligations". Avmax claimed the airline had undertaken to pay $150,000 per month for the rental and maintenance of the planes.
Last week's letter was sent to FastJet's chief financial officer Angus Saunders and Don Smith, the majority owner of Five Forty Aviation, which has a separate £4.4m legal dispute with the London-listed FastJet. Five Forty Aviation alleges FastJet has failed to honour a deal to repay debts that the company guaranteed with Chase Bank in Kenya a claim FastJet refutes.
source: Fastjet faces having planes repossessed - TelegraphLast edited by bagamoyo; 7th February 2013 at 05:39.
Hapa ni wivu, choyo, majungu na tamaa za Kenya ionekane kama ndo 'hub' ya shughuli zote za ndege maana FastJet inaoonesha kukubali kuifanya Tanzania ndiyo 'base' yake kubwa na makao yake Afrika mashariki kitu ambacho Kenya siku zote wanapiga vita Tanzania kufanikiwa katika kitu hii mpya ya kuwa makao makuu ya 'budget airline industry' katika ukanda huu wa Afrika Mashariki