The 'easy' brand name has been synonymous with budget travel since its introduction in the late 1990s. However, under a licensing deal, easyJet pays founder Stelios Haji-Ioannou's easyGroup an annual royalty of 0.25 per cent of the low-cost airline's revenues to continue using the name. This could become a significant issue for any potential buyer, with the airline's revenue expected to reach £10 billion this year.
The annual royalty payment is a significant expense for the airline, with estimates suggesting it could reach £25 million this year. This would add up to a staggering £1 billion over a 40-year period, making it a substantial cost for any takeover suitor.
The 'easy' brand name has been a crucial part of easyJet's identity, and the airline has built its reputation on offering low-cost flights to European destinations. However, with the rise of low-cost carriers such as Ryanair and Wizz Air, easyJet has faced increasing competition in the market.
EasyJet has continued to expand its operations, with the airline operating over 1,000 routes across Europe. However, the airline's financial performance has been affected by rising fuel costs, staff shortages, and increased competition.
For UK travellers, the impact of this deal may be negligible, but it could have significant implications for the airline's future operations. Potential takeover suitor will need to carefully consider the cost of the 'easy' brand name in their business plans.