Sunday, December 18, 2022

the British Airways Christmas bonus

 the Dirty Tricks Campaign of British Airways, resulted in the largest libel damage in history 

BA called passengers who had Booked on Virgin Airlines, and tell them that Virgin had cancelled the flight, and would they like a fare on BA and upgrade to first class?

25:30 minute of  https://armchairexpertpod.com/pods/richard-branson

Virgin Airlines began life in 1984 with one plane.

Virgin would use provocative marketing tactics to undermine BA publicly. Initially BA ignored Virgin, until 1990 when Virgin used its planes to rescue British citizens during the Iraqi invasion of Kuwait, flying hostages of Saddam Hussein back to Britain.

As tensions increased between the two airlines, Lord King, the BA chairman, was said to have been particularly irritated by the transfer of some of BA's London-Tokyo routes to Richard Branson's Virgin Airlines, along with the decision in 1991 to allow Virgin to operate from Heathrow.

the "Dirty Tricks" scandal was run by British Airways (BA) soon after Kuwait, where among other things, BA representatives called up Virgin customers pretending to be from Virgin Airlines, and try to get them to switch their flights to BA as well as hacking computers to gain access to insider information on Virgin's flights.


The Virgin Group chairman, Richard Branson sued BA over it and was paid a total of £3.51 million in compensation.

the rivalry turned to obsession and finally to paranoia, until British Airways (BA) - one of the country's biggest blue-chip companies, was forced to admit that it waged a two-year dirty tricks campaign against Branson which went dramatically wrong.

It was run by the rival airline BA, whereby BA representatives would call up Virgin customers pretending to be from Virgin and try to get them to switch their flights to BA as well as hacking computers to gain access to insider information on Virgin's flights. 

The Virgin Group chairman, Richard Branson sued BA over it and was paid a total of £3.51 million in compensation.

During a meeting at Gatwick Airport in which BA's chairman Lord King told his chief executive "do something about Branson", BA asked its helpline team to take on a campaign to undercut their rival: Virgin

 The team accessed passenger records stored on the British Airways Booking System (BABS) which was used by Virgin, and provided the information to the ticketing team. 

They would also call Virgin's baggage handling teams impersonating Virgin staff to try to gain insider information from them. The operation was carried out in secret behind locked doors.

 The information would be placed in a brown envelope and passed to high-ranking members of BA. When they found out Virgin flights were delayed, BA staff would approach Virgin passengers and get them to switch to BA. 

BA staff also attempted to hack the rival agents' computers once flights had departed from gates. Once BA had the passenger information, they telephoned passengers to try to persuade them to switch their flight to BA by offering upgrades. 

Sometimes BA staff would call up Virgin's passengers and pretend to be from Virgin. The BA staff would lie that their Virgin flight was cancelled and suggest that they could fly BA instead

In March 1992, Virgin sued BA for libel, BA counter-sued claiming that Branson's accusations of "dirty tricks" were baseless. 

The case was set to be heard in January 1993. The British press had dubbed the upcoming case as "The Mother of All Libel Battles". Branson had to sell his Virgin Records business for $1 billion in order to pay for the lawsuit.

A month prior to the case, following disclosure of documents that supported Virgin's claims, Branson and Lord King met and agreed to settle the case on the first day.

BA admitted in the high court that staff had engaged in "disreputable business practices" including shredding documents, passenger poaching and trying to plant "hostile and discreditable" stories about Virgin in the press.

The court ruled BA and Lord King had to release a joint statement apologizing for the "dirty tricks" campaign. 

The judge also ruled that BA would have to pay Virgin's legal costs of £3 million. He also ruled that BA had to pay £500,000 in damages to Branson and £110,000 to Virgin Atlantic. 

Branson distributed the winnings to his staff which he called the "BA Bonus". At the time, the award was the largest libel settlement in British legal history

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