Stelios 'wanted £3m for use of easy brand'
23.05.10
easyJet founder Sir Stelios Haji-Ioannou offered to settle the long-running dispute with the airline over use of the easy brand in return for £3m a year royalty payments, the Times reports. The entrepreneur, who with his family controls 38% of the airline, made the offer to the board last month ahead of a High Court battle that is due to start on June 8. The newspaper quotes 'city sources' saying they failed to agree terms, adding that easyJet could face a £5m bill for the legal costs alone to fight the case.
A £3m royalty payment would be equivalent to 0.1% of easyJet’s annual revenues. However 'other city sources' suggested the figure demanded by Sir Stelios was 'tens of millions a year'. easyJet is reported to have made its own offer to settle the case in January but it was rejected.
An agreement dating from the company’s stock-market floatation a decade ago stipulates that easyJet can earn only a quarter of its revenues from selling non-airline products such as car hire and food. The case is to clarify what activities count towards this revenue limit, with Sir Stelios reported to be seeking a share of revenues from items such as priority check-in and hold luggage fees.
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