EasyJet, the budget airline, is being taken to the High Court by founder Stelios Haji-Ioannou over the terms of its branding agreement. He is understood to be concerned that the airline is breaking a clause in its deal, which limits the amount of extra services it can offer.
The clause states that 75% of the airline’s revenue comes from its “core activity” of “transporting passengers in aeroplanes”, and there is confusion over ancillary services such as car hire and accommodation deals offered by the carrier.
The airline’s licence was drawn up in 2000 when it first floated on the stock exchange, Haji-Ioannou, the licensor of the easyJet name, owns 16% of the company and is a non-executive director.
EasyJet says that last year more than 90% of its revenues came from activities relating to transporting passengers.
Haji-Ioannou is also reported to be unhappy over the sale of charity scratch cards on board flights, where less than half the profits go to charity, as well as a number of other activities he does not feel are appropriate to the brand.
He has played down the legal move, saying it is designed to clarify the agreement eight years after it was agreed. He says: “I feel it is best to ask a judge to interpret certain clauses in the brand licence.”
EasyJet chairman, Sir Colin Chandler, says: “This is not a claim with any monetary value, rather it is a mechanism to seek clarification of certain words and clauses.”