Virgin fights back with Frisco cut

THE AIR fares war escalated yesterday, with Virgin Atlantic offering a pounds 299 return fare to San Francisco to mark the launch of the daily service on 17 May. The introductory offer is available on outward journeys made by 30 June with the return by 17 July. Virgin said that it undercut other available fares by at least pounds 100.

On Thursday, British Airways announced its second package of bargain fares within weeks, cutting its prices on 200 routes by up to 50 per cent. The latest cuts included a pounds 99 drop in the return fare from London to Boston to pounds 239, with Virgin immediately announcing a pounds 238 fare for the same route. Within the UK, BA is offering pounds 70 return fares between London and destinations including Edinburgh, Belfast, Aberdeen and Jersey.

A spokesman for Virgin predicted continued pressure on prices in the battle to win passengers. 'We are 20 per cent more efficient than British Airways and we will not be undercut - this will continue as long as it has to,' he said.

Earlier this week Virgin announced a partnership with Delta Air Lines of the US that will generate at least pounds 100m in revenues for Virgin.

Virgin and BA await a hearing next week in New York's Southern District Court concerning BA's alleged 'dirty tricks' campaign. The court is expected to decide whether such a case involving two British companies can be pursued in the US.