11 October 2010

EasyJet has agreed a deal that will end its long-running row over brand rights with its founder, Sir Stelios Haji-Ioannou. The dispute, over restrictions on non-flight revenues set out in the original licensing agreement for the ‘easy’ brand with Sir Stelios’ EasyGroup, could have led to the airline losing its right to use the ‘Easy’ name.

The budget airline has agreed a package for Sir Stelios that will guarantee him £3.9 million in the first year. In return, the airline gains the freedom to use the name and enter co-branding agreements with other companies. These are likely to include commission from hotel rooms and airport parking bought via its website. In the past, profits from non-airline related activities were limited to 25% of total earnings.

The agreement will allow the airline to use the brand for 50 years, with a minimum commitment of 10 years. It removes a clause that previously allowed Sir Stelios to appoint himself as Chairman of the airline, and ends EasyGroup’s rights of representation on the Board of EasyJet.

It will see Sir Stelios receive 0.25% of the airline’s revenues each year, fixed at £3.9 million and £4.95 million for the first two years, plus another £300,000 annually. He described the agreement as a win-win for all concerned.