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.
Last month, Winter announced he would step down as chief executive, pending a successor being found. However, a spokesman for Haji-Ioannou, who 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 three years. We believe the company will run out of cash some time in 2016. We now have about six months left to steady this ship. Time is of the essence.”
Haji-Ioannou, a longstanding critic of management at easyJet, has balked at costs including a Fastjet head office at 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.
Fastjet launched in late 2012 with domestic flights in Tanzania, with ambitions to become a pan-African budget carrier. It has since expanded its operations into South Africa, Zimbabwe, Zambia, Uganda, Malawi and Kenya, but shares plunged to a record low after a profit warning in December.
Fastjet’s shares closed down nearly 1.5% at 36p on the London Stock Exchange.
