Fastjet flies too high on executive salaries

FASTJET executives, including chief executive Ed Winter, were being paid too much given the African low-cost airline’s mounting losses and poor share performance, investor Stelios HajiIoannou said yesterday.

The combined $1.2 million (R126m) awarded to Winter and FastJet’s chief financial officer was “excessive” for a carrier that had lost $79.1m in its first full year and was worth only £26m (R463m) after a 56 percent share price slump this year, the easyJet founder said yesterday.

Stelios, who goes by his first name, said he was issuing a statement to shareholders on the day of London-based FastJet’s annual meeting after taking a stake of more than 10 percent, but would on this occasion vote in favour of resolutions as a gesture of goodwill. The entrepreneur spent years castigating easyJet’s management on the UK airline’s earnings, profit and dividend performance after relinquishing majority control.

“If the company fails to implement such changes to correct the current unsatisfactory situation with regards to losses and excessive executive pay, we will have no option but to vote against all resolutions at the next opportunity,” he said yesterday of FastJet, which began flying in November 2012.

Stelios said an independent auditor’s report also showed that the company had failed to make certain required disclosures on director pay, and that it should do so immediately.

The investor said he was still pleased with FastJet’s progress in expanding from Tanzania into South Africa, Zambia and Zimbabwe in a bid to build a pan-African carrier, as well as with the restructuring of forerunner Fly 540 and a capital expansion that had raised £15m from share sales.

FastJet’s planes flew almost three-quarters full last year. About 95 percent of planes are operating to schedule, allowing it to apply a standard revenue-management system for lowcost carriers which Winter says is key to turning a profit.