Fastjet Bows To Founder’s Call Removing CEO And General Counsel With Immediate Effect

By Staff Writer

Mar 15, 2016 07:25 AM EDT

Ed Winter, CEO of the Tanzania based African budget airline Fastjet, is going to step down this week. The decision appears in less than a month after its second-largest shareholder and founder Stelios Haji-Ioannou called for his dismissal.

Earlier in January, Fastjet has appointed a headhunter to find a replacement for Winter while reassigning him as an advisor for the next 12 months. But following recent decision, he will leave the office on March 18, according to a report published in BBC.

Haji-Ioannou owns 12% stake in the company. He has called a general meeting for immediate ouster of Winter. The low cost carrier has apparently bowed down to shareholder pressure announcing his departure, reports This is Money.

The Fastjet founder has also called for immediate removal of general counsel Krista Bates and the appointment of non-executive chairman Colin Child to an executive position. Winter has created significant overheads for the company, eventually raising the cost base, reports The Guardian quoting Haji-Ioannou.

Bates will step down immediately and Child will be appointed as executive chairman until assigning a new chief executive. However, a spokesperson for Haji-Ioannou considers the move as an in-time response for clean break.

The EasyGroup boss has accused Winter for burning some £80 million during the last three years. He predicts, the company will run out of cash some time in 2016 and only have six months left to steady the ship, cites Haji-Ioannou in a letter addressed to the Fastjet chairman.

The Fastjet founder is known as a longstanding critic of management at easyJet. He has also criticized the Fastjet management for locating its head office at a high cost location at Gatwick. The head quarter is based at a place which is 4,750 miles away from Tanzania, where the main operations and customers of the budget carrier are located. He has also accused Fastjet for presenting unrealistic revenue forecasts for a fleet of six aircraft.

Fastjet has been launched in late 2012 offering domestic flight in Tanzania while intending becoming a pan-African budget carrier. Since initiation of rolling, it has expanded operations into South Africa, Zimbabwe, Zambia, Uganda, Malawi and Kenya.

However, share prices of Fastjet have been plunged to a record low following a profit warning in December. Share prices of the African carrier have been witnessed to decline around 1.5% to 36p in the London Stock Exchange.

Fastjet founder and one of the major shareholders, has criticized its management over several events causing rise in expenditure. He has also suggested for some restructuring to save the budget carrier from cash crunch. Following his call for general meeting in this regard, the carrier has announced removal of the CEO and general counsel with immediate effect. 

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