Battle of the Airlines: Airline's liquidators examine complaints dossier

THE LIQUIDATORS of Air Europe, the airline created by Harry Goodman, are considering taking action against British Airways over the collapse of the company in March 1991. KPMG Peat Marwick, the accountants appointed as liquidators, and its lawyers are understood to be studying a large dossier of complaints, including at least four affidavits, alleging that BA was behind a dirty tricks campaign.

Phil Wallace, of KPMG Peat Marwick, one of the two liquidators, said: 'We have been watching with some interest what has been going on in the Virgin- BA case and we are looking at the position of Air Europe.'

But whether a case is mounted will depend on the strength of the evidence and willingness of Air Europe's creditors to fund legal action. Air Europe collapsed in 1991 with 2,000 job losses after its parent company, International Leisure Group, went into administration with debts of pounds 480m.

The Independent has spoken to former directors of the airline who believe it was also the subject of a dirty tricks campaign by BA. The story has similarities with that told by Richard Branson's Virgin Atlantic.

Former BA staff have already disclosed that they hacked into Air Europe's computer system to glean information about passengers and flights. They were unable to do the same with Dan-Air, which BA took over last year, but obtained information by impersonating Dan-Air staff.

According to the former Air Europe directors, the campaign began in the autumn of 1989, when Air Europe was suddenly inundated with anxious calls from suppliers querying its creditworthiness. BT demanded a deposit to cover telephone bills and its catering suppliers conducted a financial search.

Aircraft-makers including Boeing and Fokker contacted the company to say they had heard Air Europe might have problems paying for jets it had ordered. The situation was so serious that two senior Air Europe executives flew to Seattle the day after hearing of Boeing's concerns. They say Boeing told them the source of the rumours was BA.

Air Europe sources claim that a whispering campaign was beginning against the airline that questioned its financial standing. Eventually Air Europe had to put up pounds 12m in guarantees against payment of landing and parking charges at a number of overseas airports before it could continue flying the routes. By this time the airline had become so concerned that it appointed corporate security advisers. According to the sources, stories were being reported back to Air Europe's Crawley headquarters in Sussex almost daily by pilots and other members of staff. BA flight crews were telling Air Europe crews by radio that it was common knowledge the airline was going bust.

Air Europe sources say they came to believe that BA was at the root of the whispering campaign. 'I cannot overstate how insidious and frightening, almost Orwellian, it was. It was like being under siege,' a former Air Europe executive said. So serious was the situation that Air Europe staff were called to an emergency meeting early in 1990 and asked to supply any evidence they might have of a BA smear campaign.

The meeting resulted in four signed affidavits being drawn up - one from a former BA pilot who had joined Air Europe - containing details of an alleged dirty tricks operation within BA. The affidavits were subsequently lodged with the airline's solicitors, Piper, Smith and Basham.

Air Europe executives were still compiling a dossier when the airline went bust along with its parent company, International Leisure Group. All the evidence, including the affidavits, was passed to Air Europe's administrators, KPMG Peat Marwick.

(Photograph omitted)

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