City: BA grounded

IT'S HARD to imagine a more damaging blow to a company's public image than the one faced by British Airways first thing on Monday morning. In full view of the world's press, its legal representatives are going to have to stand up in court and publicly apologise to Richard Branson's Virgin Atlantic for dirty tricks and libel. Newspapers frequently find themselves in such a humiliating position, but not airlines. As far as I know, it's unprecedented.

It also goes far beyond mere embarrassment or monetary cost (about pounds 3.5m). It's the little guy striking a blow and an expose of the way big corporations try to squeeze out and trample viable competition. But worst of all, it may well mark a turning point for the worse in BA's global ambitions. If this is the way BA treats its UK competition, what tricks is it going to get up to in the US? It is not yet clear that this fiasco has finally scuppered all possibility of doing a deal with USAir, but it must be providing the US aviation authorities with plenty of food for thought. If they allow BA anywhere near USAir after this, I'd be amazed.

In Europe too, BA is becoming a bit of a pariah. All the major European airlines, led from the front by Lufthansa, are trying to do deals with one another - form operational and marketing partnerships, merge, and take stakes. Nobody, however, wants to do a deal with BA. It's too arrogant and set only on world domination, European counterparts claim. BA is in danger of finding itself left out in the cold in the era of reform and opportunity opening up in world airline markets.