Easyjet's long-running dispute with its founder Sir Stelios Haji-Ioannou, owner of the Easy Group, has been resolved.
Sir Stelios had threatened the airline with taking away its rights to the Easy brand, in a legal wrangle which went to the High Court.
The airline's founder had argued that Easyjet's operations had outgrown the terms of its brand agreement, which required Easyjet to receive 75% of its income from "core activities".
Sir Stelios contended that the airline has broken this deal by receiving more than 25% of its income from ancillary services, such as charging for baggage.
The budget carrier now has a revised brand licence agreement, which allows it to generate unlimited revenues from ancillary sales.
Under the amended licence agreement, Easyjet has the right to enter new co-branding deals with other travel service providers, but must pay 0.25% of its total revenues to Sir Stelios.
The payment is fixed at £3.9 million and £4.95 million for the first two years of the fifty-year agreement.
Easyjet can now also enter agreements with white label partners such as car hire, hotels and travel insurance companies.
Sir Stelios said the way low cost airlines make money has changed over the 10 years since the original licence was signed.
"This amendment allows the airline to now grow its business even further by removing some of the restrictions imposed by the original agreement," he said
"The agreed amendments will result in increased competition from the airline for the other Easy Group licensees (such as easyHotel, easyCar and easyBus). However the agreed royalty payable provides appropriate remuneration for Easy Group thereby aligning the interests of both parties."
As part of the agreement, Sir Stelios has waived his right to appoint himself as Easyet chairman and Easy Group no longer has any rights of representation on the Board of Easyjet
Carolyn McCall, Easyjet's CEO, said it is a sensible resolution of a difficult dispute.
"It provides easyJet with operational flexibility and commercial freedom to grow our business and it provides both sides with clarity," she said.
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