King abdicates following Virgin case humiliation

LORD King has stepped down as chairman of British Airways (BA), less than a month after the flag-carrier admitted a dirty tricks campaign against rival Virgin Atlantic Airways and its chief, Mr Richard Branson.

Following a company board meeting yesterday, BA said current chief executive Sir Colin Marshall would replace him.

Earlier reports had said Lord King would retire to ''ensure the continuity'' of the company's top management.

Some major shareholders have told the company that they have strong doubts about the wisdom of appointing Sir Colin to the roles of both chairman and chief executive.

Last week they told Mr Derek Stevens, BA's finance director, that there was a ''need for checks and balances on the board''.

Lord King, 75, was due to retire in July to become president for life of the former state-owned company, which was listed in London in January 1987. He will still take up this position.

Mr Robert Ayling was appointed BA group managing director, also with immediate effect.

Mr Michael Angus, who is president of the Confederation of British Industry and the former chairman of Unilever, remains non-executive deputy chairman.

BA maintains its directors knew nothing about the campaign against Virgin, although it paid Mr Branson about GBP610,000 (about HK$6.77 million) in damages in an out-of-court libel settlement.

Lord King apologised unreservedly after admitting some employees had carried out a smear campaign.

Virgin Atlantic claimed that BA had poached its passengers and libelled its management in an in-house magazine.

BA also admitted employees had hacked into Virgin's computer reservation system. This is currently the subject of inquiries by the Office of Data Protection.

Lord King is said by those close to him to be ''shattered'' by the events of the past few weeks.

They have marred the end of an 11-year tenure that saw him turn the airline from a state-owned loss-maker into the world's most profitable carrier.