This Day in History | 1993 – BA dirty tricks against Virgin cost £3m

British Airways has ended one of the most bitter and protracted libel actions in aviation history in a humiliating climb-down.

At the High Court Christopher Clarke QC, counsel for BA, apologised “unreservedly” for an alleged “dirty tricks” campaign against Virgin Atlantic.

BA also agreed to pay damages of £500,000 to Virgin boss Richard Branson and £110,000 to his airline, as well as incurring legal costs of up to £3m.

Counsel for Virgin and Mr Branson, George Carman QC, had told Mr Justice Drake of “distinctly hostile” rumours that had been circulating about his client.

The traditional rivalry between the two airlines intensified from July 1991 when Virgin moved the centre of its operations from Heathrow to Gatwick, in direct competition with BA.

By October Mr Branson had accumulated evidence of BA employees poaching Virgin customers and tampering with confidential company files.

He also claimed that BA’s PR consultant, Brian Basham, had been undermining him and his company’s reputation in the City and the press.

Mr Branson confronted BA’s non-executive directors about these “sharp business practises” in an open letter. They dismissed the allegations and said he was simply seeking publicity.

In February 1992, after an investigative report by Thames Television, BA bosses, including chairman Lord King, repeated their claims that Virgin was “securing publicity” in an internal magazine and various letters.

These written statements formed the basis of Mr Branson’s libel case. BA and Lord King then counter-sued over Mr Branson’s original allegations.

The counter-claim was also withdrawn today.

Courtesy BBC News

In
context

Lord King retired six months early, in June 1993, and several other senior managers came under internal scrutiny.

For the financial year 1993-94 BA still made a pre-tax profit of £301m. In the year to the end of October 1993, Virgin Atlantic declared an operating loss of £9.3m.

In April 1993 Mr Branson went on to lodge a $325million action against BA in the US, accusing it of flaunting anti-trust laws over its domination of transatlantic flight routes.

Legal wrangles over this continued until the US courts threw out the case in 1999.

In 1994 Virgin won another £2.65m from BA in a separate case about aircraft maintenance.