Jasmine Montgomery, of the Fitch Design Consultancy: "Virgin are aware that their brand heritage is very different from BA's"

BA has been forced to admit its "ethnic" designs did not win over customers in the UK, who make up nearly half of its customers.

Virgin boss Richard Branson clearly derived much pleasure at the weekend from BA's discomfort.

He said: "The squiggly lines didn't work, in Britain or abroad, and their profits have dive bombed since they introduced them and Virgin's have gone soaring up since we brought the flag back.

'Proud of Britain'

"When I talk to people from overseas they feel that Britain is something to be proud of and flying in a British carrier, whether it is Virgin or BA, is something that they feel secure and safe in."

The BBC's Simon Montague: Virgin was unimpressed

Mr Branson said BA had deliberately leaked news of its own patriotic repackaging in an attempt to steal Virgin's thunder.

BA said on Sunday it would not be completely ditching its much-criticised "ethnic" tailfin logos but would instead be repainting half of its fleet with a new Union flag logo.

BA Chief Exec Robert Ayling: "Union Flag has researched well"

BA chief executive Bob Ayling said many of its British business clientele had wanted a more patriotic livery on their planes.

He said: "It's what our customers want. It is as simple as that. People in Britain want an image which they can respond to as part of their culture."

Mr Branson said the whole "ethnic" experiment had been an expensive mistake by BA.

Fly and lie

Richard Branson: Being all things to all people didn't work

Virgin also unveiled plans to install full-size double beds for passengers on its trans-Atlantic jets.

A new fleet of Airbus A-340 planes will have part of their cargo holds converted into upmarket dormitories, although they will not be in service until 2002.

Mr Branson said: "The air hostesses would have to see what you do on take-off and on landing - but in between is up to you."

"The legitimate mile high club is born," he told reporters at the official unveiling at Schiphol East Airport in Amsterdam.

The tycoon said nearly £40m and three years of research had gone into developing Virgin Atlantic's new-look livery complete with prominent Union flag logos and "flying lady".

Virgin hopes the re-launch will help it to win a bigger slice of the lucrative business market.