EasyJet agrees deal in Stelios row

Low-cost airline easyJet today announced a deal to end its long-running row with founder Sir Stelios Haji-Ioannou and secure its use of the "easy" brand.

The budget carrier has agreed a multimillion-pound-a-year package for Sir Stelios in order to resolve an increasingly bitter dispute over a strategy which threatened to see it forced into a rebrand.

It will pay Sir Stelios 0.25% of its revenues each year, fixed at £3.9 million and £4.95 million for the first two years, plus another £300,000 annually.

In return, Sir Stelios - who along with his family owns around 37% of the airline - has revised the terms of the licence agreement, giving easyJet more freedom and scrapping clauses which previously allowed Sir Stelios to step in as chairman.

He described the agreement as a "win-win for all concerned".

Shares in easyJet rose around 5% on news of today's settlement, which will be put to a shareholder vote in the next three months.

It will remove licence restrictions on easyJet to enter co-branding promotions with other travel firms and allow it to work with so-called "white label" partners across car hire, hotels and travel insurance.

This was core to the airline's argument with Sir Stelios, which led easyGroup to start High Court action in 2008.

A judgment was due later this year, but easyJet said it was in the interests of all shareholders to reach an out of court deal.

Carolyn McCall, easyJet chief executive, said: "This is 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."

Sir Stelios - who was paid £1 a year under the existing brand licence agreement - added the payments should outweigh any competitive disadvantages to easyGroup.

He said: "The way low-cost airlines make money has changed over the 10 years since the original licence was signed. 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. The agreed amendments will result in increased competition from the airline for the other easyGroup licensees (such as easyHotel, easyCar and easyBus).

"However the agreed royalty payable provides appropriate remuneration for easyGroup thereby aligning the interests of both parties."

The entrepreneur threatened to withdraw rights to the "easy" brand in the summer as the row intensified.

He quit the board in May and stepped up his attack on the group over the following months, hitting out at delays and cancellations and saying he wanted the firm to stop buying aircraft and begin dividend payouts.

Sir Stelios could previously appoint himself as chairman and appoint two directors, but will no longer have this right as part of the new deal.

A separate agreement worth £300,000 a year will also see easyGroup commit to not using the "easy" brand to compete with easyJet in the airline market.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
The write stuff: masters of story-telling James Joyce, left, and Thomas Hardy
books...begging to differ, John Walsh can't even begin to number the ways
Sport
Jose Mourinho on Sky Sports
footballEXCLUSIVE COLUMN Paul Scholes: It was not a leg-breaking tackle, as the Chelsea manager had claimed
Sport
Romelu Lukaku scored twice to add to the hat-trick he registered in the first leg in Switzerland
football
News
Image from a flyer at the CPAC event where Nigel Farage will be speaking
news
News
people
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Software Development Manager - Hertfordshire - circa £55,000

£53000 - £58000 per annum + excellent benefits: Ashdown Group: Software Develo...

George Parlour: Assistant Accountant

£13 - £15 Hourly Rate: George Parlour: Do you want to give something back? Th...

George Parlour: Assistant Accountant

£13 - £14 Hourly Rate: George Parlour: Are you looking to climb the finance la...

Jemma Gent: Project Coordinator

£12 - £15 Hourly Rate: Jemma Gent: Are you an experienced Accounting professio...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower