Branson's Triumph: The Inside Story of British Airways Dirty Tricks Campaign

Welcome to Great Business Stories, and today's episode is called Bransons Triumph, the Inside Story of the British Airways Virgin Atlantic Dirty Tricks Campaign.

In this episode, myself and Keith do a deep dive into one of the biggest business scandals of the 1980s, when British Airways financed a dirty tricks campaign in an attempt to really publicly blacken Richard Bransons name, and also to put his fledgling airline out of business.

So we find out why Richard Branson got into the airline business and how he managed to get under the skin of British Airways.

We also discuss why British Airways, which back then was one of the biggest and most respected companies at that time, decided to wage a dirty tricks campaign against Bransons tiny new airline, and also who were the people within BA behind it all.

It's a cracking story, and we hope you enjoy it as well.

So good morning.

Morning, Keith.

Good morning.

How are you?

Not too bad.

Not too bad.

Today we're doing the dirty tricks campaign.

The British Airways, I would probably refer to them as BA during the episode and the Virgin Atlantic, and it was you who chose this story.

So why this story?

Well, I guess Branson is a larger than life character, and she would have been bubbling around, anybody with any interest in businesses, I suppose this one was really a David Goliath's story, which always sort of piques the interest, and it's quite well known.

So I just thought it might be an interesting one to kind of dig a little bit deeper into.

So I knew from a superficial level, I knew about the court cases and stuff, but I did really want to learn more about the story.

So it was a good opportunity to dig into it and find a little bit more about these characters and who the main movers and shakers were.

So I found some interesting people's less famous than Branson along the way as well.

Yeah, it wasn't.

And it's interesting you say David and Goliath, because when I was making my notes, that's exactly the way I was as well.

And I suppose for people who mightn't be familiar with it, I mean, over here, I know on this side of the Atlantic, it was one of the biggest scandals of the time.

Yeah.

But I did do some research and it was widely reported over in America as well.

But I suppose to give the listeners an overview of it, we're going back to the late 80s, early 90s.

And at the time, British Airways were the big beast in the airline business.

Their tagline was the world's favorite airline, and they were in terms of passenger numbers.

They were big.

And then you had Virgin Atlantic, which was started up by Richard Branson, and it was the up-bark, the cheeky airline.

And Branson got under the skin of Lord King, who we'll talk about.

He was the chairman of the A.

And Virgin was seen as a credible threat.

Despite its size, it was tiny.

It was still seen as a credible threat by BA.

So between getting under the skin of Lord King and being seen as a threat, BA started what became known as the Dirty Tricks Campaign, where they try to undermine Branson and smear his name really publicly, while also try to just take his business away from him.

And that's what became known as Dirty Tricks.

And it was Dirty Tricks when you read it.

Yeah, it was.

I think the book I read is by Martin Gregory.

And the story really seems to have gotten under his skin and captured his attention.

And he's had tremendous access to some of these characters, interesting characters that emerged through the story, which we'll touch on as well.

And he's done some TV shows, a World in Action show as well, which is available on YouTube, if anybody wanted to check that out.

The World in Action was a good one.

Yeah, it's really good.

It's very good.

But it seems to, yeah, so I guess we can dig into it.

We can dig into it.

And before we just dig into it, I wanted to give our listeners an overview because the airline business back in the late 80s, early 90s was a lot different to the airline business that we know of now.

Just some of the differences that I read about was that, first of all, it was a lot more glamorous.

If you were flying first class or business class back then, you had to dress in a suit.

It was expected.

Economy class came with free alcohol.

Every flight came with a hot meal.

You could check in way quicker, of course, no security.

Yeah, walk up to the gate near it.

You actually could go up to the gates.

You could see off people at the gates as well.

You could also, of course, go into the cockpit if you wanted to, or if little Johnny wanted to go and see the pilots, he was allowed to.

Now, on the negative side, it was very expensive.

I mean, you look at it today, you could fly return New York, London for under $1,000.

Whereas in 1980s, you were looking at often over $2,500.

But again, I look back further in like 1970s, it was about $3,100 return.

But the biggest thing back in the 80s and 90s was that you could smoke on planes as well, which is crazy.

I can remember they had these no smoking areas, which was a joke, really.

I know.

I think in the US, that all finished in 2000.

It was gradual.

They brought it in for flights under six hours, but it was eventually 2000 where it stopped completely in the US.

British Airways stopped smoking completely in 1998.

So there was a lot of differences.

You can see it's radically consolidated over the last 90 or 30 years.

And then you had the low cost airlines, which changed the whole psyche of flying.

It's no longer seen as glamorous.

It's nearly seen as getting from A to B as cheap as you can.

And would you have been aware of Branson?

Would he have been in your head as well?

Oh, very much so.

Very much so.

The first time I saw Branson was, I reckon I was 14 at the time, because I look back at it and he was interviewed on The Late Late Show when the Virgin Megastore opened in Dublin.

And that was back in 1986.

And I remember he made a big impression on me for two reasons on that show.

First of all, he was very charismatic.

He had the big hair, the big teeth, very outgoing, very charming.

But he didn't wear suits and he never wore suits.

He wore a jumper and jeans back then was his go-to uniform.

And back then, every businessman wore suits.

Yeah, I think actually Lord King christened him the grinning pullover.

He was grinning.

He was always had this big smile and his big teeth.

But another thing that struck me about him on The Late Late Show, so I remember the interview, The Late Late Show for people who aren't familiar with it, is a talk show in Ireland that is still going.

And I think it's the second longest running talk show in the world after The Late Show in America.

So it's a big focal point for the Irish people, especially back then when you only had two channels.

He really made business kind of sound fun, like an adventure.

Here is this guy dressed in jeans and jumper and just talking about the fun he had setting up his businesses.

Yeah, and he seemed like a swashbuckling sort of a pirate character who was taking on the big guys.

Yeah, I mean, you would be familiar.

You probably read some of his books as well.

I did, and I read Losing My Virginity and there were inspirational books at the time.

It seemed to me in a constant state of flux, really.

He was going from battling a competitor to developing a new business, and I would encounter various different brands.

I think as well, he started selling condoms in the Virgin Megastore.

That caused loads of controversy.

We thought they were legal here.

They were called legal, wasn't it?

That's right.

And that caused huge controversy as well.

Yeah, but great for PR as well, which is part of the reason why he did a lot of things.

Free publicity.

Yes, and facing himself very much front and center.

That's one of the things that I noted was that the Virgin brand was built around Branson to promote this image of cheekiness, anti-establishment, you, all this kind of stuff, and Branson was front and center of all that.

Yeah, I think that's probably what brought things to a head, or at least it's attributed to it.

At the outbreak of the Gulf War, there was a lot of British citizens obviously in Iraq and Kuwait, and Branson repurposed some of his flights to rescue these people.

Yes.

And got a lot of publicity.

Apparently, that was one of the trigger points for Lord King to pursue Branson.

It was one of the major trigger points.

There was a good few things that happened up to that point that enraged Lord King.

And I suppose we'd better talk about this guy as well, because we mentioned that it was a David versus Goliath story, but behind both airlines was two huge personalities.

Branson being one who most of us are familiar with.

But it's this other character, Lord John King, who most people, well, outside of England anyway, and probably if you weren't a Tory, you probably wouldn't be familiar with him.

I read a lot of interviews with him.

I watched a lot of video with him.

There's a great four part documentary on British Airways, which you could find on YouTube.

Really?

And one whole episode is 50 minutes long, is dedicated just to Lord John King.

So you get a good idea of what he's like.

And initially he comes across, well, let me go back to who he is.

This guy who was born in very, very, not even modest circumstances, very working class, had a ton of self-belief, always.

I don't think he ever doubted himself, is the impression I got of him.

Started up his own businesses, made a bit of money repurposing Vickers engines during World War II for the Plains, really made his first bit of decent cash when he started up a ball bearing company.

That's right.

And as he said at the time, ball bearings, why go into ball bearings?

He said, well, they're one of the most simple products in the world to make.

And for me, that really shows what kind of character he was.

He was extremely pragmatic, you know, above and beyond anything else.

He was a pragmatic, he didn't complicate stuff at all.

And he sold that ball bearing company then for three million back in 1969.

I use measuringwork.com, which is a really good tool to measure how much something was worked historically.

Three million back in 1969 is the equivalent to about 150 million in today's money.

So he made a nice chunk of change out of that.

And certainly would seem to tally with the public kind of perception of him as a landed gentry type person, what a cash would lend itself to that sort of lives.

This is it.

When you see the interviews with him, he talks very grandly.

He lived on a country estate.

He had his own cricket ground and his own cricket team.

So he comes across as this very establishment figure, but his background isn't establishment.

He very much is a working class fella.

And it was then after making his money, he became chairman of a few other businesses, I think Badcock or something like that, and started making his name as this great industrial businessman.

And it was around this time then that the Thatcher government were in power.

And one of their big driving forces or themes was to take these big, unprofitable unionized state owned businesses to try and turn them around, privatize them, make success of them.

While at the same time, if you can crush all the unions while doing that, All the Better, I think was very much their playbook.

And they approached Lord John King in 1981 to take over BA, to become chairman of BA.

So that's the, you read the book on him as well.

Yeah, it seems that they had a very good relationship.

Thatcher and King.

So he was often called her favorite business person.

And she saw him as an enabler of this privatization strategy, I think.

And of course, the duellant crown was BA.

So I guess you had governmental pressure coming to bear in what was called the dirty trick war with this government agenda to try and get the business profitable, get it privatized, point to free enterprise as well.

We're talking about the Reagan era as well.

And I think just one of the interesting stories that's bubbling around here just before the BA situation is Laker Airlines.

So Laker Airlines were Sir Freddie Laker.

And they were a big international threat as well.

And that ended up in the courts.

And Laker went to the American courts.

And what's interesting there was that Thatcher and Reagan met privately to discuss the Justice Department's treatment of Laker.

Yeah.

And they essentially, Reagan was able to call off the dogs from a legal perspective.

And Laker did have a legal settlement and became a very important sounding board and advisor to Branson over time.

But I think it could have been a lot more serious and a lot more expensive for BA.

And perhaps if things had followed their natural course, it could be the dirty tricks situation would have arisen at all.

But interestingly enough, one of the side notes in the book was that there was a considerable amount of fear at the time when Reagan and Thatcher were meeting, that they might have an agreement.

And then Reagan, who was obviously suffering from health issues at the time, would probably forget what was discussed on a one-on-one.

So they were concerned about any sort of agreements that would be made because he'd probably forget them.

And this is what, was this where BA, I only know the sort of headline figures in this, this is where BA and Pan Am and a few other airlines kind of nobbled Freddie Laker by having some sort of price fixing cartels.

And I think, I think Laker was a bit of a swashbuckling sort of PR type person as well.

So he probably got under the establishment skin.

So I'm trying to remember what the genesis of that sort of issue was.

I can't remember, but I think there was certainly allegations of a similar sort of dirty tricks.

Yeah.

I did read like he was in trouble.

He'd over expanded.

He was in deep financial trouble and all that.

But I don't think BA and Pan Am and TWA, a few other airlines anyway, did come together and they warned that the settlement was over price fixing of some sort.

Yeah.

Where they sort of agreed to try to price them out.

But I don't think they were solely responsible.

But that's interesting.

I always wondered why did they settle with Laker for so much so easily?

But as you said, it's probably because of pressure was put on them to settle.

Yes.

Yeah.

And that was because it was a perception that this court case potentially jeopardized privatization, flotation, BA, private markets.

So King had gutted the business.

Yeah.

You know, he'd take a lot of the middle management nd had readied and had the company good to go.

Yeah.

And that's to let our listeners know like the impact King did have before King came on board.

BA, the initials were jokingly referred to as standing for bloody awful.

This is because of their claims were delayed all the time.

There was strikes all the time.

There was something like 17 unions involved in the company at the time.

In 1981, they were losing 140 million.

So then King comes in, in 1981.

Within two years, he's got rid of nine of the board members and replaced them with his own.

Also within two to three years, he's got rid of 40% of the staff without any union strikes, mainly because he made really decent redundancy packages to them, which again shows his pragmatism.

I mean, yes, he was put in there by the Tories and they would love to see him crush the unions.

But I think he took a more pragmatic view of all this and thought, no, we'll just pay them decent money and we'll cut the staff that way.

And that was one of the things I got about King as well.

He does come across as this grand establishment figure, but in the interviews and he did a Desert Island interview as well.

I don't know if you've listened to that.

Desert Island for our listeners is this radio show.

I think it's still running on the BBC.

It's where they bring on a famous business person or celebrity or whatever, and they just ask them, if you were stuck on the Desert Island, what music would you play?

And Lord King was on it.

And he comes across in a very different way.

He uses words like romantic, dreamer.

Yes, I know.

I know.

And he also talks very much about the normal person working with BA.

He said, I took on the job because he said, I thought it was doable.

But I also, he said, I flew with BA in Ofalos.

He said, and I liked the people who worked there.

They were good people.

Now I might be a bit naive, but I kind of believed him.

I think he stuck to his working class roots in a way.

And he thought the only way these people are going to stay in a job is if I can cut a lot of the fat.

And I do think he was a boardroom bully.

He was an establishment figure.

But I think there was a bit more to him than this kind of Tory top as well.

I do think he never forgot his roots.

And I think, yeah, I just think it's important to make that point that he wasn't this totally one dimensional.

But he was responsible for Dirty Tricks Campaign.

And he was, by the sounds of it, an awful, tough man to deal with.

Yeah, but I guess it was a whole sort of cadre or group of people who were in this with him then.

There was Marshall, Sir Colin Marshall, Robert Ailing.

So I guess maybe he's become associated with it in a way.

But in some respects, it's a cast of characters really that contributed to this.

There was.

Having said that, I don't think anybody would have done anything without his say so.

Oh, God, no.

He was the boss.

Yes.

And I suppose that's where we sort of go to from here.

So Lord King comes in in 1981, and then he gets in new board members, gets rid of 40% of the staff, does a lot of the sort of necessary cutting that needs to be done.

And then in 1983, he appoints Colin Marshall as the CEO, and Marshall comes from Avis, the car company, where he made a good name for himself in turning around the European operations.

And together, they formed a really, really good partnership.

I never got the impression that they were friendly, though.

Did you?

I'm not sure.

No, the only person who comes across as having any sort of friendly relationship with King is this sort of interesting, peculiar sort of security guy, Ian Johnson.

So they played batgammon in the club together.

And that's the only person who really, it seems, King had a personal, out of work relationship with.

So this is the security guy who was appointed by Lord King later on in the story.

But that's the only person who will come across as having a relationship.

Doesn't seem to have relationships like that.

No, himself and Marshall got on very, very well professionally.

They rang each other at 7:30 a.m.

promptly every morning to discuss the business.

Marshall was very much on the marketing operations, running that side of the business.

King was on the strategy and the politics side.

And their main focus was on putting people first.

This was their whole drive.

And this was Marshall's drive as well, transforming staff attitudes to customers and getting that message out to the public, which they did with their TV ads.

TV ads were iconic.

Was Joan Collins in one of them?

She might have been, but I'm thinking more of the ones that had the...

What's the song?

The Flower Duet ad.

It's this famous music.

If you hear it, it'll automatically resonate with you, with the Airways ad.

And it was those kind of ads and their focus on customers that managed to turn the airline round.

I think the one with Joan Collins actually is set on an airplane, but it's not BA.

Right.

It's actually Campari or one of these things.

Yes, yes, yes.

They used to have a few of those.

Leonard's, whatever.

Yes, that's right.

From Rising Dan.

He was on one as well.

But I think I just made that mental association.

They're on an airplane.

It's BA.

Actually, it's for the drinks that we're having.

So then, 1984 and on comes Branson.

Yeah.

And I suppose for people who aren't familiar with Branson, we talked about him being this big charismatic figure, big hair, big teeth, all this.

But just to give you a quick background of where he came from for those who aren't familiar with him.

Now, he's very much anti-establishment.

Having said that, he did come from very much an over-middle class family.

He was a slight silver spoon in his mouth, but he was self-made and he was self-made at the age of 16.

He started up this magazine.

And even before that, I remember, he talked about selling Christmas trees.

But he started up a magazine.

Student magazine.

Wasn't really making money, so he decided to advertise records on the back of it.

And then he would sell these records by mail or order.

They started making money.

So he opened a record shop.

The record shop started making money.

He started then opened up a music label called Virgin Music.

His very first release was a huge hit.

It was Mike Oldfield's Tubular Bells.

It sold like 15 million copies.

Mike Oldfield at the time was only 19.

I didn't realize that.

Oh my God.

Make an association in there.

The Exorcist.

I think that music might have been using the Exorcist.

That was the reason.

It was only doing okay.

And then the Exorcist came out in 1973 and sales went through the roof.

And then they went on to sign up the Sex Pistols.

Culture Club, Peter Gabriel, Rolling Stones.

And then he set up Virgin Atlantic in a typical entrepreneurial fashion.

He was, and you know the story as well, he was in Puerto Rico, flying to his private island, Necker Island in the British Virgin Islands.

And his flight was canceled.

So he decided, I think he was meeting his girlfriend over there.

So he obviously really wanted to meet her.

So he chartered a private plane.

And they went around the airport to all the people who were on his canceled plane.

And said, I've chartered this, £39 and you got your shit on this.

So he managed to cover his cost.

And that was the start of Virgin Airways.

Yeah.

And I think coincidentally though, hadn't the bones of the airline been kicking around in a different form as well though?

I think there might have been a previous, to the best of my recollection, a previous airline with original founders.

But there was.

Who flew to default plants.

Yes.

I remember when I was doing my research, I was thinking, I read, and it was like Virgin Atlantic was founded by, and it was two other guys that I'd never heard of.

Yes.

It's a bit like today's equivalent to Tesla, when you think Tesla is founded by Elon Musk.

But it wasn't.

It's indefinitely associated with it.

So to a certain extent, that branding and marketing exercise has worked.

So I think similarly with Branson, he might not technically have been the founder, although it will be nothing without it, obviously.

Yes, but good correlation there, even in the foundation there between Musk and Branson, because both of them are very, very much associated with their companies.

They are the front and center brand of their companies, for better or for worse.

So it's sort of one plane, then one route.

One plane, one route.

It was Gatwick Newark, 1984.

That was their first one.

And then over the next few years, they added more planes and more routes.

But still, when the shit hit the fan, when this dirty tricks campaign started, it was still very much a minnow, like you had British Airways at this stage, about 182 planes, Virgin Atlantic, five or six planes.

I flew on with them a couple of times.

With Virgin, have you?

I flew to Barbados, I flew to Cape Town with them, both from Gatwick, I think, from Emory.

And it was different.

It was a very different experience.

Well, it's interesting.

You said, in what way was it different?

Just better?

So, yeah, so I think the staff were very focused on the customer, they were very attentive, they were very friendly.

The planes just seemed better, newer, better kiss, better entertainment system.

And then I can remember the freebies that you would get, like a blanket and an eye mask, earplugs and headphones were just more generous.

Ultimately, somebody's paying for this stuff.

But I guess, now I was in regular sort of cattle class or whatever you want to call it, but they did make you feel special.

Yeah, that's interesting because I read Martin Sorrell or Sorrell, the former, he was with Sassian Satchin back in the 80s, but he went on to build his own advertising empire.

But he said the same.

He said the same of Virgin back then.

He said the whole experience was just better than what you got anywhere else from the whole audio visual experience.

So he had movies on board that you wouldn't get.

Yeah, the back of the headrest sort of stuff that entertainment says.

Yeah.

Prior to that, it was one screen and you watch what everyone else is watching.

Yeah.

So they did.

They weren't afraid afraid to invest.

You know, they do get stuck in and invest in it.

It was, yeah, even back then, I'm talking about maybe 1999, 2000, around that time, it felt like a very different experience, special.

Yeah.

And there was an energy in the staff.

It was almost as if they're on a mission.

Yeah.

Yeah.

Well, I mean, that was part of the reason we talked about how Branson got under their skin.

But even strategically, from a marketing point of view, as early as 1985, BA did acknowledge that Richard Bransons, that the Virgin Airline or Virgin Atlantic, that they had a style and a flair and that they were a bigger threat to BA than all their other rivals, primarily because they were targeting and successfully targeting the younger trendsetter types, who regarded Virgin as the airline to travel on.

And like with anything, if you can get people in that are committed like that to your brands, that's a big threat, even though they were tiny compared to BA.

There was a threat that, wait a second, these guys are small, but if they keep growing, they are a big threat to us.

So yeah, and they invented this first class experience, which chauffeurs collecting you from your hotel or from your home.

Again, I didn't get the sample.

I must be sad, but they will bring you to the airport.

So it was very much a luxurious experience.

And then they kind of invented the middle class of the flight.

So a little bit better than capital class, but not as premium.

BA tried to kind of be inspired by that, but didn't pull it off as success.

Was that BA's club class or something?

So it felt as if, you know, they were setting a standard in the market that other people were following.

Yeah.

Yeah.

And I suppose that's what gets us to why the Dirty Tricks Campaign kicked off.

It was because they saw them as credible threats, there was also then though, because the government transferred some of BA's London Tokyo routes to Virgin.

This was in 1989.

Then soon after, I think around 1990, the government awarded Virgin the right to fly from Heathrow.

Which we very much saw as their turf.

Oh, Lord King was fuming about this.

He saw these as acts of betrayal.

I mean, they were legitimate acts by the government to open up competition.

And this is all part of the airline industry back then in America, in Europe.

It was happening all over the place.

But Lord King thought that these are politicians who I have backed all my life and who have backed me all my life.

And these are the very people who I am giving free flights to all the time.

And how dare they give these routes to Virgin.

And this coincided with the change in government as well, didn't it?

Didn't John Major become party leader at this stage?

There was an interesting anecdote at dawn, the time that Virgin rewarded the slots in Heathrow, in the old design of Heathrow, there was a roundabout with a copy of the Concorde.

So BA flagship plane.

And Brian Branson got in a van with a silk or material cut out, climbed on top of the Concorde and replaced the tail fin design with the BA, which was from BA with a Virgin brand, dressed up as a pirate.

And I think he must have driven people bananas with these kind of tricks.

But it was all those kinds of stuff.

But the thing is, you've got to realize, he had to do this as well.

He didn't have his big budgets.

He did not have all this money that BA had.

He only had five or six planes at this time.

But he managed to drum up all this free publicity just by putting himself front and center.

And he was ballooning and parabosing and doing all of these other kind of crazy stuff as well.

Yeah, well, he had it in 1989.

He had two balloon incidents.

He had one on April Fool's Day, where he had a balloon disguised as a UFO and flew it across London to try and scare people.

Again, generating huge publicity.

And then he nearly died in 1987, going across the Atlantic in a hot air balloon that was called the Virgin Atlantic Flyer, but in doing so, again, generating huge publicity.

So you have BA creating these fantastic ads and spending tens of millions and doing well out of it.

But you also have Branson with this tiny airline, no advertising budget, but probably generating as much publicity and the kind of publicity that he wants, again, to get across this brand of cheeky, anti-establishment, adventurous, so really being successful in that way.

They won a lot of awards from the tourism industry and the travel industry.

So they got a lot of recognition for the quality of the service and the product that they were delivering.

So you can imagine the BA establishments, they think they own Heathrow, they think they own Slotson, and they think they own the travel industry.

And this minnow is coming in and getting applauded, recognition, column inches in the press.

It must have been infuriating.

But as you said then, the tipping point was that Kuwaiti incident, when Iraq invaded Kuwait, and there was all these English citizens trapped over there.

And instead of the national flag carrier going over and taking the British citizens back, it was Virgin Airways.

And apparently as a result of that, then in 1991, I think it was Lord King called Colin Marshall and their head of PR, a guy who we haven't mentioned yet, a guy called David Burnside, into his office with the instruction, and this is in quotes, do something about Branson.

And what they did do then?

These fascinating kind of internal code words for, you know, these campaigns that they owned or told.

Well, yeah, I mean, the first one, I've got code names for two of them, okay?

But for the first one that I know about, from what I can gather, there was sort of three main stages to this.

And the first one was where the BA helpline staff were called into a meeting room and they were told, your job is no longer to help biddies get on the plane, which apparently that helpline staff did.

If you had any ticket issues or any inquiries, the helpline staff would go down and see you go on to the plane and look after you.

And they were told, that's not your job anymore.

Your job from now is top secret.

You can't tell your friends or family about this.

You are going to tap into this system, to give our listeners context, this is called the British Airways boarding system or something like that.

It was called BABS.

Booking system.

BABS, which Virgin and all the other airlines used as well.

This is crazy.

But the BA helpline staff could illegally tap into it and get all Virgin's details, all their passenger information, if the plane was delayed, the numbers of people going on the plane, the class, you know, whether they're first class, business class.

Was there a code name for that operation?

Because the others have code names.

Well, I didn't find a code name for that.

There was Operation Covent Garden.

Yes.

There was Mission Atlantic.

And then there was Operation Barbara.

Yeah.

The Barbara was the dirt digging one, which we'll get on to now.

I don't think so, actually.

And when I heard Operation Barbara, I thought, oh, well, this must be this one, because it's where they break into the Babs system.

And Babs is obviously shorter than Barbara.

So I thought, no, I know it's not.

Barbara Carton it refers to.

Operation Barbara refers to Barbara Carton.

Yeah, because she would have been the writer of these bodice ripping sort of romance novels where virgins were deflowered essentially.

OK, all right.

So we'll get on to Operation Barbara in a minute.

So the first prong of this operation anyway, was where BA helpline staff, all of a sudden their jobs changed.

They were no longer helping people get on planes.

They were now hacking into the Virgin database and getting all these vital figures.

Now, part of the reason for these figures, obviously, if you know how many people are going on a plane, what class they're flying in and all that, BA had a good idea of Virgin's revenues, which is pretty good information.

Yeah, their load factor and stuff like that.

Another good part from BA's point of view was that if they found out that a Virgin plane was delayed, the helpline staff would contact staff on the ground called hunters.

And the hunter's job was to fan out around the airport, find the Virgin passengers whose flight had been delayed, and persuade them to go on to the BA flights.

Which for Virgin was a very hard thing to counter because they were so small.

If their plane was delayed, they weren't able to turn around and say, oh, but we have another plane ready for you here, because they were too small to do that.

Whereas BA were able to just fan out and say, you know, come on our plane here, and talk them into doing that, which I'm sure would have a disastrous impact on a small business.

Yeah, they also used that information to portray Virgin as being late.

So Virgin flights are delayed or they're late getting away from the gate, which wasn't true at all.

It was actually how quickly they could turn around the gate and get people out.

So they keep the gate open a little bit later, but could turn around people, get them onto the plane, get the plane off to Tarmac.

So there was a kind of a little bit of funny business and massaging of those figures as well, which factored into some of the PR activities that were coming out.

So I guess to be accessing the bad system wasn't necessarily under an operation, but it did come into use in a number of different ways, including the PR campaign.

Yeah.

And then the other part of that operation, which kind of combined with it, I think you mentioned Operation Atlantic, was that it?

Atlantic is at the same time that Virgin were becoming a serious threat.

There was an opening up of the skies to allow the American carriers into Heathrow.

Right.

So United, et cetera.

So the idea there of Mission Atlantic was to target specific routes and flood them with capacity.

So essentially you were blanketing to sort of bolster yourself against competition and then discounting heavily to try and win a share of that market.

So to offset potential.

Which again would be hugely damaging to Virgin.

Well, also as part of the original thing where they're all tapping into Babs, is they did manage to get information.

I thought that was crazy.

They got information of passengers, flight details, and also their home numbers, or if they're staying in hotels, they'd know what hotels they were staying in.

What they would do is they would cold call these passengers and say, we know you're flying on Virgin tomorrow, but if you switch to BA, we'll throw you in, you know, free flights from London to Paris as a sweetener.

And like the very fact, can you imagine getting a cold call from an airline, who first of all, you haven't booked with, but they have your number.

And then they try and talk you out of your flights to go fly with them.

It's crazy.

Well, it's alleged in the book it actually became a little bit more serious than that because they rang up claiming to be from Virgin.

No way.

And apologizing for canceling the flight.

Oh, she offering to put them on a BA flight.

And there was a couple of people mentioned in the books who were getting very frustrated with Virgin at the time.

And they were saying, you know, maybe these guys are just not reliable.

And they'd ring back looking for the person who'd rang them.

And no person with that name existed in the call center in Virgin at all, because they weren't Virgin people.

Oh, that is sneaky.

One of the stories I heard was from a business lady who got a call and the person did say they were from BA.

And they said, look, we know you're flying Virgin tomorrow.

But if you switch to BA, and she was based in London herself, she said, if you switch to BA, we'll give you a free return trips, London to Paris and throw in a hotel and all that.

And she switched, you know, she said, yeah, okay, I'll take that.

I can't believe they also rang pretending to be from Virgin.

Yeah, and saying the flight was delayed or canceled and pulling them on to be at the same time.

There was kind of a soft cooperation really between airlines.

So if my flight was delayed, yeah, there was an arrangement that the airlines would play nicely and accommodate each other.

Yeah.

So say, for instance, if I had a personal situation at home or to get home, you would accept my say Virgin flight onto your BA flight.

And that position hardened as part of this sort of.

Yeah.

It's okay.

And you think that's bad enough.

That was just one arm of their dirty tricks campaign.

Then the second one, which is probably even worse again, which was called Operation Barbara.

And that's great context.

So it was named after Barbara Carcliffe, the author.

This is where BA hired a PR professional, a guy called Brian Basham, who's a very interesting character.

He featured on the World in Action program and even outside of the World in Action program, I did a bit more reading on him.

And this guy was a top cookie.

You didn't mess with him at all.

And if you did, I mean, the book that you read, he sued them and he successfully won as well.

I mean, this guy didn't lie down for anybody.

He was hired by BA to basically do an exercise in finding as much damaging information as he could about Branson and about Virgin Business.

He would have reported to David Burnside then.

He would have reported to David Burnside, but the Word in Action program also shows that not only did he report to David Burnside, but that Colin Marshall signed the invoice that paid him for this report.

And the reason we say that is that, as we'll see later on, that the Virgin board said they knew nothing about any of these dirty tricks campaigns.

But the Word in Action shows clearly that the CEO, Colin Marshall, signed the invoice for this guy, anyway, Basham, to do this report on Branson.

And the report was, first of all, to be presented to the board.

Of course, the other motive behind it was to leak as much damaging information from this report to the journalists.

And that's what Basham did.

He gathered some very damaging information.

A lot of it wasn't true.

It was based on rumour.

Now, in his defence, he would have said that when he rang the journalists with this, he said, this is just what I'm hearing, but you'll need to check this yourself.

But to give you an idea of the kind of stories that they put out there, one was that Virgin was running out of money to such an extent that they had to pay shell the fuel company in advance for each load of fuel that they were buying.

Now, for any small business to have a story that you're running out of money put out there, I mean, first of all, you have investors.

At the time Virgin was growing, they were looking for investors.

You can imagine potential investors hearing this story.

You have your creditors.

If you have other creditors who are hearing that you're running out of money and you're paying shell in advance, they're all going to want money in advance.

And finally, you have your customers.

Will you book a flight with an airline if you think this airline could be closed in the morning?

Yeah, you'd end up stranded somewhere.

Yeah.

So an awful story.

But I know in Martin Gregory's book, he probably has a lot more detail on.

Yeah.

And he talked a bit about Branson had a famous gay nightclub, Heaven.

I was there.

Were you?

In the 90s, I remember I was over to see my brother and Paul Oakenfold was playing there one night.

Wow.

And it was amazing.

It was like, it was kicking.

I don't know if it was a hundred percent gay nightclub by the time I got there.

It was definitely still a gay nightclub, but there was a lot of straight people as well.

But it was, it's a fantastic place.

I don't know if it's still going.

I don't know.

I don't know.

But yeah, so this was Bransons people.

Yeah, it was huge.

And, you know, it was often used as a way to discredit Branson, that he was indulging sort of an alternative lifestyle.

But in fairness to him, he was a very progressive guy and fought very hard and said, you know, these people are discriminated against.

Why shouldn't they have somewhere fun and safe to relax?

And the story was put around that the council, who would have collected the bins, refused to collect the bags from outside of heaven because they were full of syringes.

Yeah.

No.

And anything that you probably inject, not that I'm an expert on it, isn't conducive to having a good time in the nightclub.

So it's probably making a huge leap.

I definitely didn't see any needles when I was in heaven.

That's for sure.

Then there was the financial health of the overall Virgin Group.

Was kind of hint to that around in these documents.

Yeah.

There was clandestine meetings and phone calls going on as this information began to trickle out.

And Branson did run some tight businesses and kind of lean businesses.

But there was no hint that there was any sort of financial jeopardy there.

And an actual fact, I think, in the course of this story, he went on to sell his music business.

That gets us to the crux of what happened in terms of the court case and all that, I suppose.

And just before the court case, there was one other element to this, which was Operation Covent Garden, which we mentioned.

That was just your man that you talked about.

I didn't know he was so close.

Ian Johnson, who was close.

I didn't know he was that close to King.

Head of Security Ian Johnson.

BA felt that they might have a mole.

They were right.

That's right.

Because as we'll find out, that's exactly how Branson found out about this.

So they set up another operation whereby they sent out private investigators to go through the rubbish of DA staff and a Times journalist.

His rubbish was went through.

So just bizarre stuff.

They thought they were bogged as well.

And then a tape recording landed on Bransons doorstep, which Infernocy declared.

Right.

And that was a recording, I think, of Marshall having a discussion maybe with Aileen.

And then this kind of fired up that paranoia as well.

But these are sort of ex-military types.

Kind of going off clandestine meetings, meeting people, then pulls up the country, thinking they're being followed and getting paranoid.

And of course, again, significant expense encourage for this exercise.

Yeah.

So yeah, so it all comes to a culture because there's all this activity happening.

Virgin offices are starting getting phone calls from journalists, saying, can you confirm this story?

Can you confirm that?

And they're going, where is all this coming from?

They knew something was up.

And then you have BA staff that have some conscience.

Eventually, they come to Branson with this and they sort of say, this is happening.

You're right.

You're not being paranoid because a lot of people were saying to Branson, you are being paranoid.

BA themselves were gaslighting Branson saying, oh, this is all just part of self promotion on his part.

But Branson was right.

And he had BA staff come to him and confirm, this is actually happening.

So he sent a letter to the board of BA saying, look, these are the allegations that I know are happening.

And what are you going to do about it?

So again, in all this, Branson just seemed to have acted in a very, very fair, even-handed, proper way.

Until such time as he sent that letter to BA and BA, first of all, dismissed it out of hand, said there's nothing to these allegations at all, and then BA compounded it by releasing an article in their weekly newsletter.

That's right, BA News.

Yeah, where they basically said, this is all part of self-promotion on Bransons part, because that's what Branson does.

He's just a self-promoter.

Again, the biggest form of corporate gaslighting that you ever saw.

Yes.

And Branson used that article.

It was that article.

That's right.

That he used it for libel, so he said, okay, I've got you for libel here, and BA counter sued and thought that they could brazen it out.

And I think he would have ultimately preferred, certainly the book implies that he would have preferred to settle this.

Yes.

Or before going forward at all and just trying to trade in a competitive, but gentlemanly manner.

I think you're right, because that's why I think he sent the letter.

And it also comes down to the fact that, as you said, he needed to sell his company to take this action, really.

But while you're guessing at that, BA tried to brazen it out.

Lord King's MO was to be a bit of a bully, and they probably thought that the struggling Virgin airline wouldn't have the resources.

And they didn't in a way accept the fact that Branson had Virgin records.

And he sold it to take this action.

He sold it.

And I think that was the defining part.

It showed BA that I'm not going to be bullied here.

If I have to sell my baby to fight this, I'm going to sell it.

And he sold it for just under a billion dollars.

So it was a lot of money.

He was very obsessive about doing this.

As he said, I read articles with him where he was crying having to do this, but he wasn't going to be bullied.

And that was this.

And I thought that was very admirable, but it also really put BA in their place.

And they knew then, okay, he's got us here.

He's got us.

Yeah.

And at the same time, I think he was he was exploring avenues for expansion himself.

Yeah, he was looking at potential flotations or trade sales and partnerships.

And as you said, he had a load of other businesses that he was starting up around this time.

So Serling Virgin Music probably allowed him to fund all this.

But I think the reason for doing it primarily was to fight this case.

He knew that if he fought without selling Virgin Music, he could be in big financial trouble.

So he sold.

And I think on the day before they were meant to go to court or the day they were going to go to court, the BA knew that their goose was cooked and they were forced into one of the most humiliating climb downs in corporate history.

And I think it might have been the biggest, to that point, the biggest libel settlement in history.

Yeah, they had to pay Branson 500,000, they had to pay his airline 100,000, but they also had to pay a legal cost of 3 million.

That's right.

And it was fantastic.

And then Branson distributed the money that he was awarded personally to his staff and called it the BA bonus.

Exactly.

And front pages all that day or the next day were all about this case.

I remember seeing one headline, it had Lord of the Lies, Lord of the Skies, big picture of Lord King.

So this was really humiliating for them.

It was huge.

And the personal repercussions for them.

One would assume loads of heads roll, but that actually didn't happen.

That didn't happen.

The BA, even though they settled, they still sent out statements saying that their board of directors knew nothing about this, which as we saw wasn't true.

Marshall did sign the invoice.

Ailing, who became the CEO a few years down the line, was directly involved with Basham in spreading these stories.

But what happened really was Lord King moved from chairman to a newly created role of president.

Colin Marshall stayed on, I think, as CEO for another few years.

And Robert Ailey moved up to become managing director.

But nothing much changed for them in that way.

They're the only people who I think bit the bullet was their PR guy Burnside was fired with a £500,000 payoff.

And I think he also got free flights for four years or something like that.

And Basham kind of went off as well, didn't he?

I think he was only a contractor, really.

He was only a contractor.

I think he was a Burnside's right hand man, but he was an outside man.

Yeah.

So he's actually he's he's went on to various different successes.

Most recently, he was a spokesperson for Ghislaine Maxwell.

What do you see him popping up in the press?

He's definitely a Greek writer.

But I mean, at the end of it all, yeah, you can see it.

They went on with their lives.

But when you look at it, Lord King, yes, he was the poster boy for the Tory government.

He saved the business.

Whatever you read about him, wherever you read about him, the Dirty Tricks Campaign follows him like a bad smell, you know.

Yeah, and he did see he did consider BA to be the crowning achievement of his career in terms of the turnaround and the flotation.

Branson still, I was just reading about him.

He's worked 3.2 billion.

He's got his hands on a lot of different pies.

He's doing well, but I thought it was just a fascinating story.

One of the most interesting anecdotes was after all of this, the license for the British National Lottery was coming back up.

Right.

I don't know.

This was something that Branson wanted to kind of secure because he was convinced that there was too much fat in the organization.

Too many senior people were getting rich on the lottery, and he had a different structure in mind.

So one of the people who he recruited, interestingly enough, to join his bid for the lottery was no other than Colin Marshall.

You're true.

So they were going to go in at this together.

Now, at the end, Colin Marshall didn't have the capacity in his business life, he had other commitments that were holding back from it, but it speaks to Bransons pragmatism, which is actually a characteristic that you were discussing with Lord King.

So maybe that's the story here.

He sold his beloved virgin music.

He could reach across the aisle to Colin Marshall.

And then he ends up selling 49% of this airline to, I think it was Singapore Airlines.

So a very pragmatic set of people.

Very much so.

Yeah.

Yeah.

And secondly, outside of the court, at the end of the stories and other sign of pragmatism on both of us.

Yeah.

Yeah.

My one takeaway from all this, just don't pull any shady shit.

It's never worked.

When you see like Branson was so upfront, yeah, he annoyed them.

He got under their noses, but everything he did was upfront.

Whereas BA went through this shady stuff of just trying to steal customers black in somebody's name.

It's never worked.

It always just comes back to bite you in the arse ten times.

Or don't get caught, maybe.

Maybe that's the other story.

Anyway.

Okay.

Great story.

Good chance.

I'm looking forward to the next one.

I'll get back to you with that.

All right.

Perfect.

All right.

Talk to you.

Take care.

See you.

Bye.