UK budget carrier EasyJet will be able to retain its branding, after agreeing a revision of the licence at the heart of its bitter legal dispute with shareholder EasyGroup.
As part of the revision EasyGroup's Stelios Haji-Ioannou, the airline's founder, has agreed to surrender the right to appoint himself as chairman and end EasyGroup's right to representation on the carrier's board.
The new agreement - which has a 50-year term, and a minimum 10-year commitment period - clarifies the conditions of the licence.
EasyJet says it will pay royalties, amounting to 0.25% of its revenues, for the brand rights, although for the first two years it will provide fixed payments of £3.9 million ($6.2 million) and £4.95 million respectively.
The carrier adds that the pact will give it "enhanced" commercial freedom and operational flexibility, confirming its right to generate revenues from ancillary activities.
EasyJet will be allowed to form new co-branding agreements with other travel services.
Haji-Ioannou describes the new licence as "a fair deal for both sides", adding that he hopes it will enable the carrier's management to "create value for all shareholders".
"The way low-cost airlines make money has changed over the 10 years since the original licence was signed," he says.
"This amendment allows the airline to now grow its business even further by removing some of the restrictions imposed by the original agreement."
EasyJet chief executive Carolyn McCall says the "sensible" resolution provides a "workable outcome that is an improvement for both sides".
Source: Air Transport Intelligence news
