Stelios slams easyJet’s “useless” extras
Sir Stelios Haji-Ioannou has slammed “useless” extras, such as text alerts and onboard weddings, for damaging easyJet’s reputation. During his High Court hearing against the airline he founded in 1995, the tycoon accused it of “gouging” customers using “short-term responses” to revenue pressures.
Sir Stelios cited a £5.99 text message reminder service, saying that when he used it, he received a text at 10.55 – to tell him that boarding for his flight closed at 10.20.
“If I were not connected to easyJet I would have felt ripped off to the tune of £5.99,” Sir Stelios said. “This service is a small example of the drive to grow ancillary revenues leading to the introduction of services which are not really worthwhile and will damage the reputation of the easyJet brand.”
Sir Stelios, who controls 38 per cent of easyJet but resigned from the board last month, launched the attack in a witness statement in a High Court case between his easyGroup licensing company and the airline.
The dispute concerns the terms under which easyJet may use the “easy” brand name, which is owned by Sir Stelios.
His easyGroup is suing easyJet over the terms of the airline’s licence to use the easy brand. The terms say that easyJet must not earn more than 25 per cent of its revenues from non-core or “ancillary” streams.
The High Court has been asked to decide what these terms mean for easyJet. Lawyers for Sir Stelios say that ticket sales are the only core activity for an airline and everything else, including baggage, food and weddings, is ancillary.
Since easyJet makes a substantial amount from these services, Sir Stelios believes it is in breach of its 25 per cent agreement. If so, the airline would need to renegotiate its deal.
EasyJet says services such as baggage and food are core services for airlines and so should be included in the 75 per cent slice of revenues, allowing it to continue without changes.
Sir Stelios also attacked easyJet’s growth strategy, including the purchase of 52 aircraft in 2006, which he described as “inexplicable optimism that the company should continue to push for fleet growth in spite of poor economic returns”.
screen width: 120