Branson seeks BA slots on San Francisco route: Virgin boss demands Department of Trade and Industry investigation into rival
Monday 22 March 1993
Mr Branson is also writing to the Department of Trade and Industry to make a formal demand for an investigation into BA, and claimed yesterday that 'another interested party' was planning a similar demand.
The approach to the DTI and the attempt to win a toehold on the lucrative Heathrow-San Franciso route are just two parts of a campaign Mr Branson is launching against BA this week following the breakdown of talks last Friday aimed at settling the 'dirty tricks' dispute.
'I'm sure BA have better things to do than wage war with the independent airlines,' Mr Branson said yesterday. 'If BA are prepared to accept the agreement we offered last Thursday in the next 24 hours, then we'll call it a day.'
The sticking point in the draft contract negotiated between BA and Virgin was a clause that, should BA do 'anything illegal to Virgin again in the future, then Virgin cannot refer to any past evidence in future proceedings', said Mr Branson.
The Virgin boss refused to include this 'gagging clause' in the contract and the talks broke down. Now, he said, the Virgin lawyers were poised to launch writs against BA, and to recommence anti-trust proceedings in the US.
In a separate move, John Prescott, shadow transport secretary, wrote to his government counterpart on Friday requesting that the Civil Aviation Authority examine BA's 'moral fitness criteria' under recent European Community legislation, which became UK law by statutory instrument this year.
The first shot in the separate skirmish between Mr Branson and BA came last week when Virgin was given the go-ahead by the Civil Aviation Authority to challenge BA's monopoly on the Heathrow-San Francisco route.
At the hearing, set down for late June, Virgin will seek permission to substitute BA on some of its flights to San Francisco.
Mr Branson said it was wrong that BA should be allowed to fly two, three or even four flights daily on the San Francisco route while the other British airlines were not allowed one.
In anticipation of a positive ruling, Virgin is poised to go ahead with the pounds 1bn expansion of its aircraft fleet with the announcement on 7 April that it is purchasing five Airbus A340s.
The plan is to double the size of the fleet to 16 aircraft and add another five destinations to its network, including Johannesburg, Sydney, Chicago and Washington.
In order for Mr Branson to launch a San Francisco service the CAA would have to reallocate some of BA's precious take-off and landing rights at Heathrow to Virgin. BA already flies the route daily but recently announced its intention of going twice a day.
Virgin will argue that it should be awarded the slots for the second of the two daily flights. There is a precedent for such action - two years ago the CAA removed some of BA's services between Heathrow and Tokyo and awarded them to Virgin.
BA said it would vigorously oppose Virgin's application. 'We are not afraid of competition, but we do object to substitution,' said a spokesman.
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