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Bitter taste of airline feud

But in the business world, rarely has there been a relationship like that between British Airways and Virgin Atlantic.

Wednesday's £4m fine on BA, after Virgin claimed it was offering incentives to travel agents, is the latest spat in a series of disputes that have lasted throughout the 1990s.

Innovative and brash style

When Virgin first came on the scene, there seemed little threat to BA, the established, traditional national carrier.

But Richard Branson's business style matched his airline - innovative and brash.

He accused BA of poaching Virgin's passengers, hacking into computers and feeding stories to the media.

The "dirty tricks" row ended with each suing the other for libel. BA lost and had to apologise and pay Virgin £610,000 in damages.

It's against that background that their rivalry has grown, at times just as bitter, at others little more than cheeky PR point-scoring.

In 1994 Virgin won a separate long-running battle with BA over the maintenance of its aircraft. BA agreed to pay £2.65m compensation.

Mr Branson rarely misses an opportunity to put Virgin's views.

• He attacked the proposed alliance between BA and American Airlines, claiming it would dominate trans-Atlantic routes and be anti-competitive.
• He alleged that BA's application for a new Gatwick-Denver route was a spoiling tactic to block his own bid for flights to Las Vegas.
• And he argued that BA's purchase of the CityFlyer airline would give it an unfair advantage at Gatwick and stop his own expansion plans.

But the feud has not been without its moments of pure mischief on either side.

When BA famously ditched the Union Flag, Virgin started using it. But the day before Mr Branson was to unveil his airline's new patriotic livery, BA stole his thunder by reinstating it on many of its aircraft.

When BA announced it was installing beds in business class, Virgin responded by promising double beds.

Rare PR victory for BA

Mr Branson has tried to stop BA calling itself the world's favourite airline, although last month it was given permission to carry on by the advertising authorities.

And if Virgin disagrees with BA's adverts, its own don't miss a trick. "BA does not give a shiatsu" declared one, promoting the availability of a massage on Virgin flights.

But behind all the publicity-seeking and showboating, BA has suffered. The challenge from Virgin is just one of many that it faces.

Chief executive Bob Ayling has kept his counsel throughout the various episodes during his three years in charge. But it is clear that Mr Branson's barrage has had some effect.

"This is an airline. I am not going to open a bank. I'm not going to launch clothing shops. I'm not going to be dressing up in bridal gear. I'm not going to be wearing make-up," Mr Ayling told one journalist.

" I do it my way. I don't think stunts are the way to manage a company."

Well, not quite. Recently British Airways announced it would launch an off-shore Internet bank, as a service for the rich and high-powered among its frequent flyers.

David and Goliath

Looking at both companies, it might be easy to infer that there is little between them. The competition has brought more routes, cheaper flights, improved passenger services.

And yet the style of the two businesses and their bosses could not be more different.

Some see Richard Branson as a thorn in BA's flesh, others as a David to their Goliath. But there is little indication that he plans to ease up in a feud that has lasted for nearly a decade.

Relevant Stories

Virgin's battle of Britain with BA (07 Jun 99 | Business)
BA flies into furore (26 Nov 98 | The Company File)
BA profits nosedive (09 Nov 98 | The Company File)
Virgin slashes air fares in BA price war (13 Oct 98 | The Company File)

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British Airways
Virgin Atlantic

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