EasyJet has agreed to pay founder Sir Stelios Haji-Ioannou an annual royalty of 0.25% of its revenues for the next 50 years in order to be allowed to keep the ‘easy’ name.
The payments, made to Haji-Iannou’s easyGroup, will be capped at £3.9m and £4.95m in the first and second years respectively.
In return, Haji-Iannou has agreed to give up the right to appoint himself as easyJet chairman and easyGroup will give up the right to appoint directors to the airline’s board.
Haji-Iannou remains easyJet’s largest shareholder, with a stake of 38%.
The Cypriot entrepreneur had been critical of the airline’s growth strategy and threatened to strip the airline of its name.
He claimed the airline was in breach of its brand licence which limits easyJet’s earnings from non-core activities to no more than 25% of revenues. Haji-Iannou claimed income from ancillary sales, such as baggage check-in, was not part of the airline’s core business.
A new brand licence agreed today gives easyJet the right to earn revenue from ancillary services and to enter into co-branding agreements with other travel service providers.
EasyJet chief executive Carolyn McCall said:"This is a sensible resolution of a difficult dispute that provides a clear, fair, workable outcome that is an improvement for both sides."
News of the end of the long-running dispute with Haji-Iannou boosted easyJet’s shares by 4.45%.
By Linsey McNeill
