EasyJet says settles legal dispute with airline's founder

11th October 2010, Comments 0 comments

Easyjet on Monday said it had settled a legal dispute with Stelios Haji-Ioannou, the founder of the no-frills airline, concerning use of the company's brand.

Stelios' company easyGroup IP Licensing (EGIP) had claimed that easyJet had breached the terms of a branding licence agreement, specifically by increasing its income from non-ticket revenues beyond an agreed 25 percent of total sales.

But the airline issued a statement to say that their dispute has now been resolved.

"A revised brand licence agreement ends the long-standing uncertainty arising from the on-going dispute and confirms easyJet's right to generate revenues from ancillary activities," the statement said.

EasyJet's right to the brand will last for 50 years, with a minimum commitment from the airline lasting 10 years, in return for an annual royalty payment to Stelios of 0.25 percent of the group's revenue.

The payment is fixed at 3.9 million pounds (4.45 million euros, 6.22 million dollars) and 4.95 million pounds for the first two years.

Stelios has meanwhile lost the right to appoint himself chairman of easyJet, while easyGroup will no longer have representation on the easyJet board.

"The way low cost airlines make money has changed over the 10 years since the original licence was signed," Stelios said on Monday.

"This amendment allows the airline to now grow its business even further by removing some of the restrictions imposed by the original agreement.

"I am content this is a fair deal for both sides."

EasyJet chief executive Carolyn McCall said the deal was "a sensible resolution of a difficult dispute that provides a fair, clear, workable outcome that is an improvement for both sides.

"It provides easyJet with operational flexibility and commercial freedom to grow our business and it provides both sides with clarity," she added.


© 2010 AFP

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