Fastjet in dispute over Fly540 brand licences

LONDON Wed Feb 6, 2013 6:05am EST

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LONDON (Reuters) - Fastjet, the African budget airline backed by easyJet founder Stelios Haji-Ioannou, is in a dispute over the right to use the Fly540 brand in Angola, Ghana and Tanzania.

The brand's owner, Five Forty Aviation, said on Wednesday that it had withdrawn the licences it had granted to Fastjet's operations in the three African nations to use the Fly540 brand because Fastjet owes $7.7 million in outstanding licensing fees.

Five Forty Aviation also said that Fastjet was in breach of commercial and safety conditions.

Fastjet said that it "categorically refutes" the claims made by Five Forty Aviation Chief Executive Don Smith and is "preparing to take legal action against him should he not cease and desist".

Five Forty's Smith said: "We had no choice but to take this action because the most worrying aspect of non-compliance with the licensing agreement is that we have no way of assuring that the planes are safe to fly."

He added that Five Forty had not received any safety reports for the past three months from Fastjet's Africa operations and that it believes that one Fastjet plane, which flew from Tanzania and landed in Nairobi in December, should not have flown.

Fastjet, which also operates in Kenya, was formed in June 2012 to take advantage of Africa's burgeoning markets after a reverse takeover by investment company Lonrho's LONR.L aviation unit. EasyJet founder Haji-Ioannou owns a 5 percent stake in Fastjet. (Reporting by Rhys Jones; Editing by Rosalba O'Brien and David Goodman)

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