The year – 1993; the players: British Airways and Virgin Atlantic; the characters: Lord King and sir Richard Branson; the beauty: Heathrow Airport; the weapons: the whole arsenal of BPR!
Well, this is not the Trojan War, but its plot became as epical as those of ancient Sparta. Although the script was written more than ten years ago, the communication politics of British Airways is probably one of the most popular and honest examples of how the big ones actually compete with each other.
The story starts here: In 1991 the British Government made the decision to let Virgin Atlantic fly into Heathrow by abolishing “The London Air Traffic Distribution Rules” despite facing mounting opposition from British Airways, whose senior management was exerting pressure on the Government to maintain the status quo. The situation became even more critical with the decision of Malcolm Rifkind (the former secretary of State of Transport) to allow VA to have two extra flights to Tokyo. By estimation of Lord King, which he detailed in the Guardian, that decision would cost around £ 250 million, a year in lost revenue, which would go straight into Richard Bransons back pocket
. All of this became the main trigger for BA’s so called “dirty tricks” campaign that could be divided into six different sections – press campaign, spoiling tactics, private investigators, engineering matters, dirty tricks and sales and marketing.
As every other war, BA relied on the establishment of a special internal team, aiming to discredit Virgin’s reputation. The staff in BA sensitive areas were briefed on anti-trust laws and how to respond to sensitive information , involving their rivals. The management also had ordered the shredding of documents relating to Virgin. Their other task was to gather as much information about Virgin as possible. This included flight information, the number of passengers booked on flight, the actual number of passengers who went on board the aircraft, the mix between upper class and economy and departure times. The research conducted by BA didn’t stop there. Brian Basham was involved with the creation of a special report, revealing the strengths and weaknesses of Virgin and its chairman. According to the paper , there were two things which could really drag Branson down. One of them is his physical courage ( his ballooning passion for example), which could put him into a major risk. Let’s not forget one of the main rules of Black PR, which says What leads the leader into danger, leads the business into danger too
. So if something tragic happened to him, the whole business would collapse , because in this case it is his charm and magic that pulls the cash into business
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The next thing which Basham mentioned is the possible “moral threat”. There were many rumours at that time that Branson’s bar “Heaven” is a traffic palce for many drug dealers and prostitutes. The aim of British airways was to expose this information in the newspapers and thus harm their rival’s identity and the way they run their operations. They were also trying to create a buzz over the financial weakness , facing Virgin Atlantic at that time. Lloyd’s was trying to pull its loans out because of Virgin’s inability to pay its interests on time. But this wasn’t strong enough. Brian Basham was hoping to pitch to the financial editors another disturbing story. It was about VA having to pay for its fuel in cash because of a low credit rating. This was the sort of rumour that would cause the most damage to Virgin and probably lead to Shell (their fuel supplier) demanding cash for fuel and that in turn would put them out of business due to its own momentum. The aim of BA was pretty clear. Fuel represents over 20 per cent of VA costs and without the cash-flow credit which comes form the passengers paying for their tickets upfront and them paying for the fuel a month later, Branson had to take out a further loan which no bank would countenance. Fortunately for him Shell denied this information and the company had been saved one more time.
Using media relations was not the only part of BA strategy. In the summer of 1988 , British Airways was engaged with the technical maintenance of Virgin’s 747s . BA engineers had failed to spot a crack in a pylon, the link between the engine and the wing. Eventually a new pylon had to be ordered and the plane was put out of service. To top it all, BA refused to let Virgin have one of their spare aircraft to replace their 747. The situation became even worse: the spare part wasn’t available ; there was another delay; the plane lost its space at the hangar; then the engineers weren’t available; and so the saga went on. All in all, Virgin’s 747 was grounded for sixteen days in August, the busiest time of the year. The response of BA senior management to Richard Branson was “That’s one of the perils of being in aviation business. If you’d stuck to popular music you wouldn’t have had this problem . No we won’t lend you a plane”
The most crucial moment came when a couple of Virgin clients had been contacted by BA officers, pretending to be from their rival firm. What they did was basically persuade them to switch to the other company. The motives were different each time- the flight was overbooked, none smoking seats were full, the flight was delayed. After that, they were offering them other available flights with BA at a lower cost. The other approach was to call their own clients , who had been changing their regular BA flights with those of Virgin and asked them for the reason for their conversion. The major problem here is not that they don’t have the rights to do such a survey but how they possibly got such sensitive and confidential information about their competitor’s clients such as home numbers, frequently of flights , personal details and many other facts. Actually this was and the most crucial moment of the whole process, giving the advantage of Virgin to win the trial against BA (which was faced with a legal bill of up to £3m, damages to Branson of £500,000 and a further £110,000 to his airline )
Well many of you probably think why I am writing this post now, especially in a time when Virgin is facing much more major problems. I believe that BA affair has several valuable lessons to teach . The first one is that Black PR is real and is out there. Obviously British Airways has failed to implement a successful campaign, but there are so many others organisations which remain unknown regarding their own dark practices. I read somewhere that every six of the cases in Crisis PR is due to deliberate actions taken by the side of competitions. Secondly, most of the companies refuse to consider the crisis in more global context and do not have the right attitude to spot the attacks. Finally it raises questions about how the new technologies and Web 2.0 have changed the way the attacks operate and whether or not the international competition law has enough power to stop them.
