easyJet founder Sir Stelios Haji-Ioannou is taking to the witness box today in his High Court hearing against the airline over a brand licence disagreement.
Stelios, who recently resigned as a director but remains a significant shareholder, is suing easyJet over allegedly overstepping a brand licensing agreement made at its floatation in 2000, which limits the ancillary services to 25 per cent of total income.
In its opening, easyJet told the court that the core activity of its brand licensing agreement HajiIoannou was focussed on “putting a passenger’s bottom on a seat in the aircraft”.
The case hinges on whether services such as baggage and speedy boarding, as well as food sold on board and charges for infants, should be classed as ancillary or core services.
Geoffrey Hobbs QC, representing easyJet, told the High Court that its core activity was passenger transport in aircraft and it had to preserve its customers base by “giving them what they wanted”.
“What you do not want to give them is some austere service in which even provision of the lavatory on an aircraft is regarded as ancillary,” he said, adding that it would be “quite wrong” to take such a view.
easyJet has argued in court documents that there should be no objection to it: “fully and effectively servicing the flight-related needs and requirements of its airline passengers”.
The carrier claims that Stelios’ witness statement “digresses into various matters unrelated to the issues in the case”, including the airline’s planned expansion of its aircraft fleet.
easyJet argued in the court documents that the fleet expansion “is a matter of no relevance to the pleaded issues” but it “nonetheless appears that Sir Stelios regards it as a matter on which he is at liberty to attack the board of easyJet at the trial”.
Stelios’ lawyers have claimed in court documents that he is concerned that growing easyJet’s Airbus fleet “appears to depend on expanding the range and relative significance of non-ticket revenues”.
His QC said: “The wider dispute centres around the number of aircraft easyJet is purchasing and the strength and transparency of the case for doing so. 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.”