Tuesday, October 13, 1998 Published at 09:58 GMT 10:58 UK
Business: The Company File
Virgin slashes air fares in BA price war
Richard Branson has thrown down the gauntlet to British Airways
Richard Branson has launched a price war with arch-rival British Airways by cutting fares on Virgin Atlantic in half.
The move will see the pre-tax price of return flights to New York cut to £140 from £310 and flights to Hong Kong slashed to £279 from £569.
BA is offering reduced price flights from October 28 but this involves collecting tokens before potential passengers can qualify for the discounted flights.
Virgin's air fares have been deliberately set to undercut BA's discount offer by a few pounds and the offer will run from today until October 28.
Mr Branson said: "We will never be beaten by BA on price and will always offer better quality."
He added: "This is another war between Virgin and BA which proves that competition works and that the consumer is the ultimate victor."
A spokesman for BA echoed Mr Branson's comments.
But that was the end of any agreement between the two airlines and the BA spokesman pointed out that BA's offer through the newspapers covered 150 destinations and was "truly worldwide" while Virgin could only offer a handful of flights.
"Clearly Richard Branson will only be able to fly to 12 places just because Virgin is much smaller than BA," he said.
But Mr Branson had his own criticism to make of BA's scheme of offering the fares through a newspaper promotion.
"Virgin's new fares are the cheapest across the Atlantic and to take advantage of them you don't have to collect tokens you just need to call Virgin and book."
The BA spokesman also argued that the battle was not a true trans-Atlantic price war because Virgin had flights to far fewer US destinations than BA.
The price war will put immediate pressure on other airlines like American Airlines and Continental Air to try to match the BA and Virgin discounts.
Mr Branson admitted the offer was going to cost Virgin "a fortune" but a spokesman for the airline said the flights would still be profitable for Virgin.
Virgin - BA Price war
Return fares excluding taxes:
BA - £143 Virgin - £140
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