Lonrho acquisition brings FastJet closer to reality

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Stelios Haji-Ioannou's plans to launch a low-cost carrier in Africa have moved a step closer to reality, following the acquisition of Lonrho Aviation by Stelios-affiliated British investment firm Rubicon.

Pan-African conglomerate Lonrho's aviation division was acquired for $85.7 million, Rubicon says in a statement, which places Nairobi-based low-cost carrier Fly540 in the investment firm's hands.

Fly540 has four key bases in Kenya, Tanzania, Angola and Ghana, giving the upcoming FastJet venture a strong foothold in the expanding west African aviation market. The regional airline carried more than 500,000 passengers last year.

Under the terms of a 10-year brand licence, Stelios's EasyGroup will own 5% of Rubicon with the option of acquiring a further 10%. It will also receive royalties equivalent to 0.5% of revenue.

EasyGroup will be expected to appoint two directors to the board of Rubicon - likely to be Stelios and Ed Winter, former chief operating officer of EasyJet and founding director of low-cost carrier Go. It will also provide consultancy services to Rubicon throughout the 10-year term.

"This is another small but significant step in bringing the dream of low cost air travel to millions of people in Africa - the aviation industry's last frontier," says Stelios.

The Greek Cypriot tycoon, who founded EasyJet in 1995, has been locked in a long-running dispute with the low-cost carrier since resigning from its board in 2010. Stelios's family retains a 37% shareholding in the company, and he has been a vocal critic of the expansion strategy of chief executive Carolyn McCall.

EasyJet previously said it "will take necessary action to protect the rights of EasyJet and the interests of its shareholders" in light of Stelios's new venture. The airline did not immediately respond to a request for comment.