EasyJet 2011 Annual Report Download - page 99

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26 Related party transactions
On 11 October 2010, easyJet announced that it had reached an agreement on its dispute with easyGroup IP
Licensing Ltd (“easyGroup”) and Sir Stelios Haji-Ioannou over the terms and operation of the easyJet brand
licence.
Under the agreement an annual royalty of 0.25% of total revenue (fixed at £3.95 million for the year ended
30 September 2011 and £4.95 million for the year ending 30 September 2012) is payable for a minimum term
of ten years.
A new brand protection protocol was also agreed. easyJet must meet the costs to protect the “easy” and
“easyJet” brands alongside easyGroup on a ratio of 10:1 respectively up to a combined cost of £1.1 million per
annum. Beyond the first £1.1 million of costs, easyJet can commit up to an aggregate £5.5 million annually to
meet brand protection costs, with easyGroup continuing to meet its share of costs on a 10:1 ratio. easyJet must
meet 100% of any brand protection costs it wishes to incur above this limit.
A separate agreement has been entered into with Sir Stelios Haji-Ioannou, for two years, where for an annual fee
of £300,000 he will not licence the “easy” brand to an ATOL holder in relation to the sale of airline seats, not to
sell the shares in easyGroup or the easyJet brand or to acquire an interest in any other airline for two years.
Further details of the agreement can be found in easyJet’s Annual report and accounts 2010.
The amounts included in the income statement for the year ended 30 September 2011 for these items were as
follows:
2011
£ million
2010
£ million
Annual royalty 4.0 –
Brand protection (legal fees paid through easyGroup to third parties) 0.7 –
Agreement with Sir Stelios Haji-Ioannou 0.3 –
5.0 –
easyJet plc
Annual report
and accounts 2011
GovernanceCorporate responsibility
Business review Performance and risk
Overview Accounts & other information
97