Branson and BA close to deal over 'poaching'

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BRITISH AIRWAYS and Richard Branson's Virgin Atlantic meet again this morning to hammer out a final settlement of their dirty tricks dispute. The agreement is likely to include a

pounds 10m- pounds 15m compensation payment by BA and a legally binding agreement not to poach passengers unfairly.

Talks in central London between the airlines and their lawyers broke off after 12 hours last night with a few sticking points. Another session of discussions then opened just before 10pm.

Trevor Abbott, Virgin's group managing director and chief negotiator on behalf of Mr Branson, said: 'A deal is never a deal until it is signed. It would be very sad if we don't settle this. It takes two to tango . . . and I suspect we'll still be here tomorrow discussing it.'

However, both sides expressed a willingness to reach a deal after it had seemed only a costly anti-trust action by Virgin in the US courts would settle the dispute.

Mr Branson has already ac cepted the cash compensation offer in respect of passenger poaching and a BA smear campaign in the press. The offer was made at his home on Tuesday morning by Michael Davies, one of BA's non-executive directors.

However, the airlines were still not agreed last night on all elements of the 'competition code' Virgin wants BA to sign. BA is prepared to give legal undertakings not to poach unfairly by accessing Virgin's computer records to obtain passenger details, or to impersonate Virgin staff.

But it is unwilling to stop wooing Virgin customers at airports with legitimate offers of upgrades to Concorde or free flights, regarding that as a legitimate business practice. It is concerned that if it gives in to Virgin's demand it will face similar requests from other airlines or even an anti-trust action on the ground that such an agreement would amount to collusion between Virgin and BA.

The breakthrough appears to have come on Tuesday morning after Mr Branson's 24-hour ultimatum for settling the dispute and the revelations that BA staff in Los Angeles were still cold-calling Virgin passengers.

Both developments are thought to have disconcerted BA. The head of its North American operations, John Story, is understood to have been dispatched to Los Angeles yesterday, accompanied by a New York lawyer, to interview the travel agents who made the new allegations about passenger poaching.

Mr Abbot and Robert Ayling, BA's new group managing director, have been in almost constant negotiations since Tuesday morning with Mr Branson dropping in and out of the talks and Sir Colin Marshall, BA's chairman, being kept informed.

The settlement would mark the end of an extraordinary and largely public battle which began in December 1991 when Mr Branson wrote to BA's non-executive directors about the dirty tricks campaign. BA paid pounds 610,000 damages, and an estimated pounds 3m costs, and apologised to Mr Branson and Virgin in the High Court last month.