Heathrow-Virgin Spat: Virgin Caves, but Wins the PR Battle

(MoneyWatch)  Last month, Virgin Atlantic decided to stand up to Heathrow Airport by refusing to pay landing fees to protest how the airport handled a December snow storm that stranded thousands. Heathrow's owner BAA has now smacked back, and Virgin Atlantic is walking away like a dog with a tail in between its legs. Then again, it still looks like the winner in the PR world.

Virgin Atlantic's original idea was to withhold landing fees that it owed to BAA for flights in January to make up for the heavy losses sustained in December when a little snow and ice shut the airport for days. Of course, there weren't any problems in January, so Virgin Atlantic had no real right to do this. At the time, I suggested it was a classic Virgin Atlantic PR move:

So why is Virgin Atlantic doing this? Probably for the press, which wouldn't be out of character. This makes Virgin Atlantic look like the good guy and casts BAA as the villain. It helps with public opinion, but it hurts the airline's relationship with the biggest and most important airport in its system.

As you can imagine, BAA wasn't amused. Although it denies it actually made the threat directly, BAA was happy to point out that it has the right to start impounding airplanes if an operator doesn't pay the fees that it owes. So BAA could have snagged a 747 or two if Virgin Atlantic continued to refuse to pay.

Virgin, of course, knew this was possible, and it backed down immediately. In a statement, the airline said "the airline is not prepared to jeopardise thousands of customers' travel plans in the event that BAA takes action that could ultimately impact on its flying programme." Well, yeah.

In the end, however, Virgin Atlantic probably got a nice PR bump as a champion of the people. It helped push the spotlight further on to BAA as the failure point during the December storm and not the various airlines at Heathrow. It, along with other airlines, will continue to push for compensation, but it will now use proper channels instead. That's the good news.

But what did Virgin Atlantic lose in all this? It certainly must have caused a dent in its working relationship with BAA. The spat is over, but how will BAA deal with Virgin Atlantic going forward? I suspect BAA is likely to take a hard line with Virgin, such that the airline won't see much assistance in future situations where it might want it. We'll see if this little fight was worth it later on.

Related:

• Airlines vs. Airports: Virgin Atlantic Stiffs Heathrow After Icy Shutdown
• London Landing Fees Hiked More Than 20 Percent
• At Heathrow, a New $7 Billion Terminal Actually Doesn't Seem Crazy

Photo via Wikimedia Commons user By Simply south/CC-BY-SA-3.0