This article was first published in the summer of 2019 as part of a 100 part series on the history of BA and its predecessor airlines. You can read the full series in numerical order, by theme or by decade.
When Sir Richard Branson founded Virgin Atlantic in 1984 Sir Freddie Laker, the founder of Laker Airways and the Skytrain, offered some words of advice “If you are taking on British Airways and Pan Am and they have massive ad budgets, you have to use yourself to get free advertising”.
Sir Richard had good reason to listen to the words of Sir Freddie. After its collapse, BA and Pan Am reached an out of court settlement with the creditors of Laker Airways in response to allegations of anti-competitive activity.
And take the advice he did. When Virgin Atlantic launched its inaugural flight from London Gatwick to Newark on 22 June 1984, Sir Richard was the public face of the airline. On the inaugural flight he dressed up in a captain’s uniform and partied with celebrities. A similar pattern followed for subsequent route launches. This was of course a sharp contrast to BA’s corporate image and Lord King and Colin Marshall.
Of course, amongst all the many PR stunts by Virgin Atlantic, there has been no greater source of publicity for the airline than its David and Goliath rivalry with BA.
It is a story that has been well documented. For the past 35 years the two airline have a relationship that could at best be described as “complex”. Though, it is not always as straightforward as some would like to make out.
According to an internal BA report, allegedly leaked to Virgin Atlantic in early 1985, BA acknowledged that Richard Branson had given the airline “style and flair” and was a bigger threat to the airline than its other US cut price rival People Express. Virgin’s passengers were “trendsetter types” who, particularly younger travellers, regard it as “the airline to travel on”.
When Virgin Atlantic started operations at Heathrow in 1991, Sir Richard dressed up in a pirates uniform and put a Virgin flag over a model Concorde aircraft and branded the airport “Virgin Territory”. Lord King was also reportedly furious at Virgin securing traffic rights to Tokyo Narita.
The nadir of the relationship was in 1993.
British Airways reached an out of court settlement with Virgin Atlantic, paid the airline £610,000 in damages and issued a public apology following a libel case bought by Sir Richard. This was covered in edition of ITV’s “World In Action” below:
Amongst the allegations made by Virgin Atlantic against BA were:
- Efforts by BA to obtain confidential computer information about Virgin Atlantic flights.
- The solicitation by BA representatives of Virgin Atlantic passengers inside airports and at their homes.
- Attempts by BA representatives to impersonate Virgin employees.
- The shredding by BA employees of documents related to the case.
- Efforts by BA to circulate to the news media misleading reports about Virgin.
- Efforts by a British Airways consultant to plant hostile or negative reports in the news media.
Although BA insisted that its directors “had not been party to any concerted campaign against Richard Branson or Virgin Atlantic” it admitted that an internal investigation had found “incidents involving our employees which we accept were regrettable and which gave Richard Branson and Virgin Atlantic reasonable grounds for concern.”
The case also prompted significant management changes at BA with Lord King being replaced as Chairman and a number of senior staff departing the airline. The case was a PR gift for Virgin Atlantic and Sir Richard Branson will never let BA forget it. “Virgin Screws BA” was the headline in The Sun newspaper.
“BA don’t give a Shiatsu”
The case made the airline an easy target for opprobrium from Virgin Atlantic.
Aided by a very effective and, at times, extremely cunning PR team, whatever happens at BA, Virgin always had a response guaranteed to get publicity.
Following the adverse reaction to BA’s “World Images” tail fins, Virgin spoofed the designs on in-flight sickbags on its inaugural flight to Sydney.
After delays to the BA sponsored Millennium Wheel, Virgin launched an air balloon with the slogan “BA Can’t Get It Up!!”.
When BA announced the withdrawal of Concorde from service in 2003, Virgin insisted that it should be able to buy the aircraft with the claim “BA can’t keep it up. Virgin can!”.
Virgin also revelled in decisions by BA to ban surfboards, to edit Sir Richard Branson’s cameo appearances out of the James Bond film “Casino Royale” and the chaotic opening of London Heathrow Terminal 5.
For the most part, BA had little choice but to maintain a dignified silence.
Another difficulty for BA was that as a public company, it is bound by strict stock exchange rules on the release of share price sensitive information.
As a privately owned company, Virgin had no such obligations. It could often claim to be “considering” launching things that never came to fruition. This included double beds and private bedrooms in its Upper Class cabin, Airbus A380s with gyms and casinos, and all business class flights to New York.
Relations between the two airlines did improve under the leadership of Sir Rod Eddington with BA and Virgin staff holding an annual cricket match. It was at this event that two airlines were alleged to have held conversations about colluding on passenger fuel surcharges.
The two airlines reach a settlement with the US Department Of Justice, following a disclosure by Virgin Atlantic. In a criminal trial of four BA executives that subsequently collapsed due to late disclosure of evidence by Virgin Atlantic, the former CEO of Virgin Atlantic Steve Ridgway and two other Virgin Atlantic executives admitted under immunity from prosecution that they had been fully aware of conversations between BA and Virgin Atlantic over fuel surcharges. (Financial Times). Sir Richard Branson was also conspicuously absent from view when news of the settlement broke. (BBC News)
The fortunes of the two airlines have diverged substantially in recent years. There is now a huge gulf in the profitability between them.
Two factors have course this:
After two unsuccessful attempts, and many protests from Virgin Atlantic, BA finally secured its transatlantic joint-business with American Airlines. This was due to the liberalisation of the transatlantic market under the EU-US Open Skies treaty.
By being able to co-ordinate schedules it has made American Airlines and BA significantly more competitive on major transatlantic routes such as Los Angeles, Miami and New York. Access to American Airlines’ US customer base has also enabled BA to launch many new transatlantic routes.
The merger of bmi and BA in 2012 gave BA scope for significant growth at Heathrow whilst at the same time depriving Virgin of short-haul feed. Virgin has tried unsuccessfully to replicate this twice. Once through the launch of its own short-haul feeder airline Virgin Little Red. The second, through an attempt to form Virgin Connect, through the purchase of Flybe.
IAG’s current CEO Willie Walsh, an advocate of “rational” behaviour by airlines, has never hidden his disdain for Sir Richard.
When Delta acquired a 49% stake in the airline Willie could not resist claiming that other Richard (Richard Anderson, then CEO of Delta) was now running Virgin and that the Virgin Atlantic name would soon cease to exist.
Later on this year, Sir Richard is expected to cede control of Virgin Atlantic, leaving Delta as the single largest shareholder. Whilst Willie Walsh’s prediction has not come to pass, the two airlines are now undeniably on very different trajectories.