■ TANZANIA: Fastjet working closely with creditors over Don Smith's undisclosed historic debts: Ed Winter.

After yet another round of press reports stating the carrier was in legal trouble regarding its alleged failure to settle bills run up by its Tanzanian predecessor, Fly540 Tanzania, LCC fastjet has issued a second statement rebuking claims it still owes money to its Kenyan subsidiary Fly540 Kenya.

Canada-based ACMI firm AvMax Aircraft Leasing recently wrote to Fastjet stating it had moved to deregister three of its aircraft previously leased to Fastjet's predecessor, Fly540 Tanzania, over USD2million worth of unpaid leasing and maintenance bills. Fly540 Tanzania operated a single Bombardier CRJ-100 in addition to a Dash 8-100 wet-leased from Fly540 Kenya.

In a statement, fastjet said:

In response to recent misleading press reports, the Board of fastjet plc wishes to clarify its position relating to "false and damaging" statements made by Don Smith, CEO of Fly540 Kenya, the Group's Kenyan subsidiary.

The Company categorically refutes claims made by Don Smith regarding any unpaid consideration for the purchase of its interest in Fly540 Kenya and numerous other unsubstantiated claims made through the press in recent weeks. fastjet, following consultation with its senior legal advisors in East Africa, is preparing to take legal action against him should he not cease and desist.

Commenting on the recent allegations, fastjet Chairman David Lenigas said:

David Lenigas

"fastjet is committed to conducting its business in an open, transparent and  entirely legal manner  through the proper channels. The Company does not intend to continue rebutting false allegations through the press but will take legal action over any further such claims.

"fastjet has paid Don Smith and his partners well in excess of US$6 million for their interest in Fly540 and associated brands and we will now aggressively seek to have our purchase contracts enforced."

"The Company will not tolerate coercive and underhand practises. Issues created by Don Smith in Kenya have not and will not affect fastjet's overall plan of becoming Africa's first pan-continental low-cost carrier."

"The Company's position in Kenya, just one small part of our overall expansion plan, has already been secured through its MoU with Jetlink, announced last week.  We feel that Jetlink, which already has IOSA accreditation, is a far better Kenyan partner for  fastjet given our  standards of safety, security and reliability .  Following an extensive review, we concluded that Jetlink would provide a better long term launch-pad for fastjet due to its superior infrastructure and accreditations to service and manage a fleet of modern large jet aircraft."

"Africa carries nearly 4% of global passenger air traffic but unfortunately today accounts for nearly 25% of the world's aviation accidents. Our mission to bring safe air travel to the people of Africa requires high standards and constant vigilance that these are being met."

Ed Winter, fastjet’s chief executive, added: 

Ed Winter

"Where previously undisclosed historic debts accumulated by Don Smith and Fly540 have come to light post-acquisition, fastjet is working closely with creditors  to reach a satisfactory conclusion for all parties involved. We do not agree with the amounts mentioned in recent press articles are and where amounts are recognised as owing do not deem them significant in relation to the business as a whole.  These isolated issues are not affecting the day to day operations of fastjet or any of our  operations in Angola or Ghana that fly under a  separate Fly540Africa brand."

"fastjet will seek to recover these undisclosed debts and any other amounts due under the warranties given by Don Smith and his partners in their agreement to sell their interest in Fly540 Kenya to fastjet in June last year."

"The fastjet management team remains steadfastly committed to the Company's development, building on our success in Tanzania and continued growth towards democratising African air travel and becoming the first pan-continental low-cost carrier."

"In the meantime, we continue to work with the relevant authorities in other countries in Africa to expand the fastjet network."

Source [fastjet]

Fastjet has been embroiled in a fiasco with Don Smith, the founder of Fly540, over who is responsible for debts that Fly540 accrued prior to Fastjet's acquisition of Lonrho's airline division, Lonrho Aviation which included Fly 540, in 2012 for a transaction value of USD85.7million.