Tag Archives: franchise agreements

Fastjet and Five Forty Aviation continue their public dispute over ownership and the use of the Fly540 brand

Fastjet (Dar es Salaam) and Five Forty Aviation (Fly540) (Nairobi) continue to trade statements in their on-going very public dispute. Yesterday (February 7) Fastjet issued this statement for their side of the dispute:

Fastjet logo

“In response to recent misleading press reports, David Lenigas, Chairman of Fastjet plc and Chairman of Five Forty Aviation Limited (Kenya) (“Fly540 Kenya”), confirms that there is no valid Brand Licence Agreements, Franchise Agreements or Management Agreements between Fly540 Kenya and Fastjet or any other Fly540 associated companies in Africa.

Statements made by Don Smith from Kenya, a director of Fly540 Kenya, suggesting he has the right to withdraw the brand are absolutely wrong and without foundation. The Board of Directors of Fly540 Kenya has never met to even consider this issue.

Fastjet wishes to advise the media and our passengers who fly with us throughout Africa in either a Fastjet plane, Fly540 plane or Fly540 Africa plane, that we are looking forward to expanding our low cost airline throughout the African Continent.”

Five Forty Aviation has responded back with their counter argument of the facts:

Fly540 logo

“Five Forty Aviation Limited (“Five Forty Aviation” or “the Company”) provides the following update to correct the factual inaccuracies contained in the statement issued by FastJet on February 7, 2013.

Rights to Fly540 brand

The Company asserts that licencing agreements exist between Five Forty Aviation Limited and FastJet’s Africa Operations: Fly 540 Angola – Sociedade de Aviação Civil SARL (“Fly540 Angola”), 540 Ghana Limited (“Fly540 Ghana”) and Fly540 (T) Limited (“Fly540 Tanzania”), and that these agreements are in writing and are evidenced in various confirmed financial statements. Lonrho Aviation (BVI) Ltd cannot produce written proof that it has held the sole and exclusive rights to the Fly540 brand, and its claim to have held these rights “for a number of years” is a complete falsehood.

FastJet’s Africa Operations, previously Lonrho Aviation (BVI) Ltd, have been licencing the Fly540 brand from Five Forty Aviation since 2008. FastJet’s Africa Operations now fly three Fly540 branded planes in Angola and two in Ghana. It flew two planes using the Fly540 brand in Tanzania until November 2012.

Control of Five Forty Aviation Limited

The latest returns from the Registrar of Companies in Nairobi, as supplied by Anjarwalla and Khanna, the lawyers acting on behalf of Fastjet, on January 30, 2013, show that the shareholders of Five Forty Aviation Limited comprise 530 Investments Ltd (the investment vehicle of Don E. Smith), owning 1,999 shares (representing 51% of the Company), and Lonrho Africa (holdings) Limited, owning 1,923 shares (representing 49% of the Company).

Fastjet’s statement is incorrect in claiming that it acquired Five Forty Aviation through its acquisition of Lonrho Aviation (BVI) Ltd. Interested parties are invited to read Fastjet’s listing document (available from Fastjet’s website), which clearly states that it was to acquire only a 99% economic interest in Five Forty Aviation. It was never to acquire control of Five Forty Aviation.

As all the conditions of the acquisition were not met, Fastjet did not gain a 99% economic interest in the Company. Five Forty Aviation remains majority owned by 530 Investments Ltd and maintains its independence from FastJet. Copies of all licence agreements and returns of the Registrar of Companies in Nairobi are available on request.”