Financial News

  • 11 December 2012, 13:08

Branson Bets Walsh 1m On Virgin's Survival

Sir Richard Branson has called his arch rival Willie Walsh's bluff and asked him to put a 1m bet on the future of Virgin Atlantic.

The Virgin founder has rejected speculation by the chief executive of British Airways' owner IAG that the Virgin brand will disappear from the skies after a reported investment deal with Delta Airlines.

In a blogpost on the Virgin Atlantic website Sir Richard wrote: "Rumours have been spread in the press that I am planning to give up control of Virgin Atlantic and, according to Willie Walsh - who runs BA - that our brand will soon disappear.

"This is wishful thinking and totally misguided. Will BA never learn? Let's see how much they believe this. Let them put their money where their mouth is."

Virgin Atlantic has refused to comment on newspaper reports that Delta is poised to buy Singapore Airlines' 49% stake in the loss-making airline.

Delta's main interest in Virgin is in its prized landing slots at London Heathrow, the world's busiest international airport, where the American airline wants to have a greater market share.

Sky sources suggest a deal could be announced in the coming days.

Mr Walsh said: "I can't see Delta wanting to operate the Virgin brand because if they do what does that say about the Delta brand?"

Sir Richard responded angrily by promising to pay BA staff 1m if the Virgin Atlantic brand is ditched within five years and called on Mr Walsh to do the same if he is proved wrong.

"Virgin Atlantic was my baby 28 years ago when we set up with just one plane. Like all children, they never really stop being your babies and Virgin Atlantic is still much cherished," he said.

"We intend to carry on doing so for many years to come and, contrary to Mr Walsh's hopes, we have no plans to disappear."

The rivalry between Sir Richard and BA dates back to his airline's foundation and descended into a "dirty tricks" campaign by BA, whose staff actively tried to poach Virgin customers and who used shared airport computer systems to tamper with confidential company files.

Virgin Atlantic made a pre-tax loss of 80m in the year to February and has been in search of strategic airline partners having so far refused to take part in a wave of consolidation and mergers across the industry.

Singapore Airlines has acknowledged it is in talks to sell its shareholding but said that no decision has yet been taken.

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