Fastjet (Dar es Salaam) and Fly540 (FFV, Nairobi Jomo Kenyatta), have officially ended their tense relationship after fastjet Plc agreed to dispose of its remaining shareholding in the Kenyan LCC to its managing director and founder, Don Smith.
"All legal and financial ties between the two companies have been dissolved and each group has indemnified one another against any and all liabilities relating to the segregation of the businesses," fastjet said.
The relationship between the two entities was fraught with bitterness culminating in early 2013 when fastjet threatened Smith with legal action after Fly540 claimed that Fastjet still owed it USD7.7 million in licensing fees for its other brands namely Fly540 Tanzania (Dar es Salaam), Fly540 Ghana (Accra) and Fly540 Angola (Luanda 4 De Fevereiro).
A Memorandum of Understanding was signed in April last year ceasing the hostilities while allowing negotiations to proceed.
"Following a period of complex negotiations, we are delighted to have achieved a successful outcome for all parties. After a thorough and lengthy evaluation of Fly540 Kenya, we concluded that converting the business into the fastjet low-cost model would not be economically viable," fastjet's Interim Chairman and Chief Executive, Ed Winter, said. "Disposing of our investment in Fly540 Kenya allows us to pursue our priority objective of creating fastjet Kenya as a new entity which will operate to the same low-cost model, international standards of safety, reliability and punctuality as fastjet Tanzania and utilise the same commercial strategy and distribution platforms. Further information on the Company's plans to launch fastjet Kenya will be announced in due course."
In the wake of the fall out with Fly540, fastjet had also explored the possibility of a tie-up with the quasi-defunct Kenyan regional carrier, JetLink Express (Nairobi Jomo Kenyatta).
As it stands, Fly540 and fastjet are set to compete in both the Kenyan and Tanzanian markets. It is to be recalled that Fly540 subsidiary, Fly SAX (Nairobi Jomo Kenyatta), intends to launch its own Tanzanian low cost carrier, SAX-Tanzania (Dar es Salaam), in due course.
