EasyJet's growth branded imprudent

EasyJet founder Sir Stelios Haji-Ioannou does not like the direction the now-public company is heading and took it to the High Court yesterday.

He is claiming the airline is exceeding its rights under a branding licence agreement which limits the amount it can make from everything not including flying passengers from A to B to 25 per cent of total income.

Michael Bloch QC, representing Sir Stelios's company, easyGroup IP Licensing (EGIP), said when the licence was issued, easyJet was a "straightforward, focused, low-cost airline".

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He told Mr Justice Henderson the dispute between the parties centred on what constituted ancillary and core activities.

Ticket prices are agreed to be core, but food off the trolley, travel insurance, hotel bookings and car hire at passengers' destination are said by EGIP to be ancillary and by easyJet to be core.

Mr Bloch said that according to easyJet's latest accounts, ancillary activities account for 20 per cent of its income but EGIP claims if the figures are dealt with correctly under the licence, the true amount is more than 25 per cent and growing.

"The wider dispute centres around the number of aircraft easyJet is purchasing and the strength and transparency of the case for doing so.

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"As a shareholder, Sir Stelios is concerned that what he considers to be imprudent growth ties up capital, reduces ticket revenue per passenger, depresses profit margins and prevents easyJet paying dividends."

The case, during which Sir Stelios will give evidence, continues.

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