The row between easyJet and its founder Sir Stelios Haji-Ioannou has intensified with the entrepreneur accusing the airline of being in an “operational mess” and threatening to remove its brand licence.
Sir Stelios has written to easyJet chairman Sir Michael Rake to complain about the airline’s increase in cancellations and poor punctuality record at Gatwick in recent months.
He has also issued a “cure” notice to easyJet to demand that the airline improves its performance by October 26 or Sir Stelios will act to terminate easyJet’s brand licence with his easyGroup business, which could result in the airline having to rebrand under a new name.
In his letter, Sir Stelios said: “The result of the operational mess that the company is in is that it has too few staff to meet the number of flights it has sold. This leads not just to delays but a serious increase in cancellations, seemingly many at the last minute.
“This is extremely detrimental to the goodwill and reputation of the airline and the brand in particular. Many years of carefully building goodwill is being eroded in a matter of months.
“As the owner of this brand I cannot stand by and let this happen. This is why I have served a cure notice demanding easyJet improve its punctuality and cancellation performance.”
EasyJet is disputing that Sir Stelios has the right to tear up the brand licence agreement over punctuality.
“EasyJet is advised that that the brand licence does not impose or create any contractual obligation regarding on time performance and consequently easyGroup has no right to terminate the brand licence,” the airline said in a statement.
Earlier this summer, the two parties met in the High Court in a separate dispute over the airline’s sales of ancillary products.
Sir Stelios is still the easyJet’s biggest shareholder with a stake of around 38%.
Click here to view original article by Rob Gill, TTG Live, Thursday 29th July, 2010
