Mr Branson will today lodge a complaint to the competition authorities over the sale of CityFlyer Express to BA. He said the deal would give BA even more dominance at Gatwick, London's second major international airport, as well as controlling the majority of slots at London's biggest hub, Heathrow.
Mr Branson said his airline was approached about buying CityFlyer in the spring and was interested in doing a deal but failed to open talks despite numerous attempts. Mr Branson said he believed BA had an "anti- competitive, pre-emptive right" to CityFlyer which cut out rival offers.
He plans to complain to John Bridgeman, the director general of Fair Trading, at a meeting today. "I will ask him to act decisively," said Mr Branson.
Mr Branson said in a statement that HSBC, the banking group, approached Virgin in the spring to ask if it wanted to buy CityFlyer. "We said we would like to buy it but HSBC never came back to us with a price despite a number of calls."
BA yesterday announced it had agreed to buy CityFlyer, which is one of its franchise operators, for pounds 75m. BA bought the franchisee airline, which operates out of Gatwick, from institutional investors led by venture capital company 3i Group.
"We can only assume that BA has some kind of secret, anti-competitive pre-emption right in their franchise agreement with CityFlyer, and that we were being used as a stalking-horse," said Mr Branson.
Bob Ayling, BA chief executive, said the purchase was "good news for customers, employees and for Gatwick".
Mr Branson yesterday announced plans to recruit 1,500 staff at Virgin Atlantic and its sister companies between now and spring 2000.