BA100: 14. Virgin Atlantic

100 Years Of British Airways: The long-standing rivalry between BA and Virgin Atlantic.

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British Airways & Virgin Atlantic Aircraft, London Heathrow
British Airways & Virgin Atlantic Aircraft, London Heathrow (Image Credit: Heathrow)

Welcome to our 100 part series on the history of BA and its predecessor airlines.

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 in 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.

BA had to compete against many rivals in the 1980s such as British Caledonian, British Midland, and Laker Airways. However, the rapid ascent of Virgin Atlantic in the 1980s, which resulted in the airline securing access to Heathrow, clearly got to BA.

When Virgin Atlantic started operations at Heathrow 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.

“Dirty Tricks”

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, whether it was delays to the BA sponsored Millennium Wheel (“BA Can’t Get It Up!”), BA banning surfboards, the withdrawal of Concorde from service, or the chaotic opening of Terminal 5, Virgin always had a response guaranteed to get publicity.

For the most part, BA had little choice but to maintain a dignified silence.

"BA don't give a Shiatsu"
“BA don’t give a Shiatsu” (Image Credit: Virgin Group)

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, 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. 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, which it is now trying to replicate through 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.

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