What Sir Stelios did next: set up a rival airline to easyJet

(PA)

The most dysfunctional business relationship in aviation took another bizarre turn yesterday when it emerged that Sir Stelios Haji-Ioannou, the billionaire founder of easyJet, is proposing to set up another airline, called Fastjet.

The news broke when easyJet issued an angry statement insisting that its agreement with Sir Stelios restricted his options for establishing potential competition for the low-cost airline, saying that it would "take necessary action" to protect the brand.

The rift between the UK's biggest carrier by passenger numbers and its largest shareholder has dogged the airline for years. Recently it has centred on the rate of expansion of the airline and the terms by which Sir Stelios's easyGroup licences the name to easyJet. But at the root appears to be the self-styled entrepreneur's unhappiness at ceding control of the airline that transformed European aviation.

Stelios Haji-Ioannou was young, gifted and rich when he decided to set up a no-frills airline in 1995. As an industry outsider, he proved the ideal pioneer: questioning every aspect of conventional airline operations, from travel-agents' commission to inflight catering. From an airline with a questionable livery painted on two borrowed Boeings, it has grown to a fleet of almost 250 Airbus jets – and in the process dramatically cut the cost of flying for the mass market.

So successful they have been that it is difficult to see what space there might be for another start-up airline. The only clues yesterday were two websites, e-jet.com and Fastjet.com, both registered to easyGroup, Sir Stelios's holding company. Both have a deep red background and the message "By Stelios. Coming soon!"

Speculation has included the possibility that the entrepreneur may emulate his mentor Sir Richard Branson, and start researching supersonic travel – or at least revive the idea of Boeing's "Sonic Cruiser", flying close to the speed of sound. But the most likely model is an innovation based on more efficient usage of executive jets – in a sense, the opposite of democratic, mass-market easyJet. At present business aviation is a thoroughly inefficient industry, involving many "empty legs" – planes flying with no passengers. It is conceivable that an entrepreneur with vision and cash can come up with a web-based system that turns the business on its head, as easyJet did.

This would put him in opposition to established aviation interests, particularly the conventional airlines with business cabins, such as BAA, Air France and Lufthansa. But it is also possible that he will simply aim to emulate easyJet, despite the constraints on slots at conventional airports – and the legal threats from the airline.

His easy empire

easyRentacar (Launched April 2001)

A brilliant idea that was ahead of its time. Stelios procured a fleet of A-class Mercedes and rented them out for as short as time as one hour. It mutated into easyCar – a standard car-rental broker.

easyCinema (Launched May 2003)

Could film fans be lured to the cinema by the promise of a 20p film? Not in sufficient numbers. Stelios abandoned the "bricks and mortar" strategy in 2006 – now runs mainly as a DVD rental and cinema booking service.

easyBus (Launched August 2004)

The most enduring terrestrial transportation venture is easyBus, which has mutated into a frequent, low-cost airport bus link.

easyEverything (Launched June 1999)

A chain of city centre internet cafes. The high rents made it unprofitable. Rebranded as easyInternetCafe after a £15m cash injection from Stelios, and devolved to franchisees by 2009.