Sir Stelios to launch easyJet rival

EasyJet founder Sir Stelios Haji-Ioannou is poised to go into battle with the airline he set up 16 years ago by launching a potential rival called Fastjet.

In a shock move, Sir Stelios has written to easyJet to announce plans to form the new carrier and has already established www.fastjet.com, which currently reads "Fastjet.com by Stelios. Coming soon!".

The move is the latest instalment in a series of conflicts between the billionaire entrepreneur and the airline in which he and his family own a 38% per cent stake.

It looked as if the two sides had settled their differences last week after easyJet agreed to pay £190 million in dividends to shareholders, including Sir Stelios.

Sir Stelios, who owns the easyGroup holdings company, which controls the "easy" brand, declined to comment on the announcement.

EasyJet has vowed to fight Sir Stelios if Fastjet infringes on the rights of the airline and its shareholders.

In a statement, easyJet said Sir Stelios also alleges the carrier has breached the terms of a "comfort letter" dated October last year - making it null and void. EasyJet said it "emphatically" rejected the claims.

The comfort letter included a "mutual respect" clause that prevented Sir Stelios from speaking negatively of the airline, while also preventing him from either setting up a rival airline or becoming a significant holder in another carrier.

Easyjet said it "continues to seek constructive dialogue" with easyGroup and Sir Stelios, who was knighted in 2006 for services to entrepreneurship.

A spokesman for Sir Stelios later said the airline founder believes easyJet directors breached a clause in the comfort letter which stated they would remain committed to enhancing the easyJet brand's reputation.

The statement made no reference to Fastjet.

PA