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Plenty of people cried foul when British Airways announced a deal to coordinate scheduling and marketing with American Airlines, but the biggest whiner was Richard Branson. The loudmouthed head of Virgin Atlantic called his archrival's proposal a "monster monopoly," launching a war of words between the two airlines that makes the presidential campaign look downright civil.
The deal, which includes Spanish carrier Iberia, is the airlines' second attempt to get cozy selling tickets on each others flights, pooling revenue on selected routes and combining their scheduling and marketing efforts. It's a bit like a merger but without the messy paperwork. It's also a bad idea because it will give the two airlines a dominant share of the market for key transatlantic routes, allowing them to raise fares.
Branson spouted off against the deal the day it was announced, prompting Willy Walsh, the CEO of British Airways, to say hearing Branson gripe was like "listening to a broken record." Virgin fired back with a press release headlined "British Airways should know about broken records – nothing's changed since they last failed to link up with American Airlines."
These two make McCain and Obama look like best buds, and the latest spat is another chapter in the often brutal, always entertaining 17-year hatefest between the UK's two largest airlines.
The sniping started in 1991 when the British government, hoping to keep Virgin Atlantic from tumbling into bankruptcy, lifted a 1970s-era rule limiting access to London's giant Heathrow airport. British Airways was none too happy to find itself suddenly competing with Virgin on some of its most lucrative business routes. The airline's CEO, always a bit of a drama queen, complained that the government's move amounted to "confiscation of property." Wah, wah, wah.
That started a two-year throw-down between the two airlines that the British press -- always known for its restraint -- coined the "Dirty Tricks" campaign. Eager to ruin Virgin before it could make inroads at Heathrow, British Airways allegedly hacked Virgin's computers, used confidential data to poach customers and employees and hired a PR flack to spread nasty rumors about Virgin to tarnish its reputation with financiers and the public.
Branson went on the offense, complaining to anyone with a pulse that British Airways wasn't playing fair. British Airways called him a desperate publicity whore. When an unflattering investigative report about British Airways aired on British television, the airline accused Virgin of planting the story and said as much in an internal employee newsletter. Branson, never one to miss a chance to get some ink, sued British Airways for libel. Back and forth it went, like a game of corporate ping-pong.
At the end of the day, British Airways lost the case, apologized to Branson "unreservedly" and wrote a him a big check. Branson, of course, summoned the press to say he'd divided the money among employees in what he called the "British Airways Bonus." The whole sordid tale was recounted eight years ago in the book Dirty Tricks: British Airways' Secret War Against Virgin Atlantic.
Mutual dislike aside, the two airlines aren't above getting into bed together when it suits their bottom lines. In 2006 the two companies were found to colluding in a price-fixing scheme on some transatlantic routes. Virgin got off without a fine, but British Airways had to pay out £271 million.
But they're back at it again, providing the British press and air industry watchers with another round of laughs. It's always fun watching outrageously rich guys behave like children.
Photo: Virgin Atlantic.
