rising fuel prices. Most dismissed his jibes as irrelevant. Virgin Atlantic was a minnow, ranking tenth in terms of passengers carried on the transatlantic routes, and his airline was weakened by his refusal to join a code-sharing alliance with other airlines. But his biting comments did affect BA’s struggle to survive.
To compete against the two major alliances created by other European airlines with two American giants – Delta and United – BA wanted to forge an alliance with American Airlines. Branson deemed BA’s survival plan a threat to Virgin Atlantic’s independent existence, and in 1996 he had orchestrated a blockbuster campaign in London and Washington to persuade the two governments to prevent BA’s alliance with AA. In 2004, the circumstances changed, when the EU and the US government annulled all restrictions on transatlantic travel. Among the casualties was the Bermuda Agreement of 1976, which had limited access for flights from America to Heathrow to two American and two British airlines, one of which became Virgin. Overnight, Virgin’s lucrative protection at Heathrow disappeared. Branson, as the champion of competition, should have welcomed the benefits to travellers but, since his profits were threatened, he protested.
He railed against BA’s new bid for an alliance with AA, yet approached Sheikh Ahmed Al Maktoum of Dubai to discuss co-operation between Virgin Atlantic and Emirates airways. Branson’s good fortune was that the public ignored his contradictions. Few ever quite understood his undisguised fears about fuel prices. In public speeches, he often mentioned that ‘I am building bioethanol factories to get an alternative to oil and cutVirgin Atlantic’s fuel bill.’ He would even repeat his mantra during a visit to Dubai while opening a Megastore.
In early August 2004, alarmed that Virgin Atlantic’s finances were being jeopardised by rising fuel prices, Branson began speculating with his executives about BA’s reaction to the increases. Would BA levy a higher fuel surcharge? For Branson, BA was the elephant threatening his survival, but his obsession was not reciprocated. BA regarded Virgin Atlantic as one of many small competitors, albeit an unreliable irritant. Considering the historic enmity between Virgin and BA, the likelihood of BA executives inviting Branson to join a conspiracy to fix the surcharge was low. But the evidence presented by the prosecutors in Washington and later London, based on the information supplied by Virgin, suggested the opposite.
In the first days of August, Virgin executives decided to increase the fuel surcharge by £5. Soon after the decision was taken, Branson asked Paul Moore to discover from journalists whether BA intended to levy a higher surcharge than Virgin. Moore reported to Branson that BA was briefing selected journalists that their surcharge would increase.
Soon after, Branson telephoned David Parsley, a sympathetic financial journalist employed by Express Newspapers. ‘British Airways’, said Branson, ‘are going to increase their surcharge.’ Branson was hoping that Parsley would discover the amount. After thanking Branson for the tip, Parsley called Iain Burns, who confirmed that BA’s surcharge would increase from £2.50 to £6, or possibly £8. The newspaper would publish Parsley’s discovery three days later. According to the defence lawyers in the subsequent trial, the timetable laid suspicion at Branson’s door. After speaking to Parsley, stated BA’s lawyers, Branson told Moore to call Burns. Branson, it was alleged, did not want Virgin to take the lead and make the announcement alone.
If that scenario was true, then Moore would appear to havemade the first call. However, supported by Virgin’s executives, Moore emphatically denied taking the initiative and starting the conspiracy. After all, that admission would have cast Virgin as the architect of the crime. The obfuscation benefited Virgin because, from the outset
To compete against the two major alliances created by other European airlines with two American giants – Delta and United – BA wanted to forge an alliance with American Airlines. Branson deemed BA’s survival plan a threat to Virgin Atlantic’s independent existence, and in 1996 he had orchestrated a blockbuster campaign in London and Washington to persuade the two governments to prevent BA’s alliance with AA. In 2004, the circumstances changed, when the EU and the US government annulled all restrictions on transatlantic travel. Among the casualties was the Bermuda Agreement of 1976, which had limited access for flights from America to Heathrow to two American and two British airlines, one of which became Virgin. Overnight, Virgin’s lucrative protection at Heathrow disappeared. Branson, as the champion of competition, should have welcomed the benefits to travellers but, since his profits were threatened, he protested.
He railed against BA’s new bid for an alliance with AA, yet approached Sheikh Ahmed Al Maktoum of Dubai to discuss co-operation between Virgin Atlantic and Emirates airways. Branson’s good fortune was that the public ignored his contradictions. Few ever quite understood his undisguised fears about fuel prices. In public speeches, he often mentioned that ‘I am building bioethanol factories to get an alternative to oil and cutVirgin Atlantic’s fuel bill.’ He would even repeat his mantra during a visit to Dubai while opening a Megastore.
In early August 2004, alarmed that Virgin Atlantic’s finances were being jeopardised by rising fuel prices, Branson began speculating with his executives about BA’s reaction to the increases. Would BA levy a higher fuel surcharge? For Branson, BA was the elephant threatening his survival, but his obsession was not reciprocated. BA regarded Virgin Atlantic as one of many small competitors, albeit an unreliable irritant. Considering the historic enmity between Virgin and BA, the likelihood of BA executives inviting Branson to join a conspiracy to fix the surcharge was low. But the evidence presented by the prosecutors in Washington and later London, based on the information supplied by Virgin, suggested the opposite.
In the first days of August, Virgin executives decided to increase the fuel surcharge by £5. Soon after the decision was taken, Branson asked Paul Moore to discover from journalists whether BA intended to levy a higher surcharge than Virgin. Moore reported to Branson that BA was briefing selected journalists that their surcharge would increase.
Soon after, Branson telephoned David Parsley, a sympathetic financial journalist employed by Express Newspapers. ‘British Airways’, said Branson, ‘are going to increase their surcharge.’ Branson was hoping that Parsley would discover the amount. After thanking Branson for the tip, Parsley called Iain Burns, who confirmed that BA’s surcharge would increase from £2.50 to £6, or possibly £8. The newspaper would publish Parsley’s discovery three days later. According to the defence lawyers in the subsequent trial, the timetable laid suspicion at Branson’s door. After speaking to Parsley, stated BA’s lawyers, Branson told Moore to call Burns. Branson, it was alleged, did not want Virgin to take the lead and make the announcement alone.
If that scenario was true, then Moore would appear to havemade the first call. However, supported by Virgin’s executives, Moore emphatically denied taking the initiative and starting the conspiracy. After all, that admission would have cast Virgin as the architect of the crime. The obfuscation benefited Virgin because, from the outset
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