Perhaps the most surprising element of the British Airways-Virgin Atlantic price-fixing scandal is that these two airlines managed to cooperate over anything.

For more than two decades Sir Richard Branson’s Virgin and BA have been locked in bitter competition on the lucrative transatlantic route. Their feud is one of the ugliest on the British corporate landscape and has involved spying, lying and dirty tricks.

Sir Richard founded his airline in 1984 and, with his flair for publicity, it quickly developed a loyal customer base. It was one of those publicity coups that is rumoured to have led to BA’s infamous “dirty tricks” campaign against Virgin.

In 1991 Sir Richard sent a Virgin aircraft to Iraq to rescue British citizens before the Gulf War. Lord King, BA’s chairman, is said to have been so incensed that Virgin was usurping the British flag carrier that he ordered an all-out attack on his rival.

The dirty tricks campaign is alleged to have included spies searching through the rubbish of Virgin executives, theft of passenger details and lying to journalists about the company.

Sir Richard took BA to court and won £500,000 personally and £110,000 for the airline, plus £3 million in legal fees. The money was given to Virgin staff in what became known as the “BA bonus”.

In the mid-1990s when BA was attempting to merge with American Airlines, Virgin campaigned to block the deal, claiming that it would be bad for passengers. Its aircraft were painted with the logo “NoWay BA/AA”.

When BA dropped the Union Jack from its tail fins Virgin responded by repainting its own to include the flag. Sir Richard was then able to boast that Virgin was now “Britain’s flag carrier”. BA later reversed its decision.

Relations between the two airlines began to improve this decade and this led to 18 months of illegal discussions between executives over how to add fuel surcharges to air fares. Virgin said yesterday that it blew the whistle on the conspiracy when the airline’s lawyers found out what was going on.

Willie Walsh, chief executive of BA, is said to be furious that careless and unprofessional actions by two of his senior lieutenants have cost the company at least £269 million. He said yesterday that if he had been made aware of what was going on, he would have been the one to blow the whistle.

Sources close to the airline said that there was a sense of frustration that BA was carrying all the blame while Virgin has largely escaped censure. But BA knows that it could have acted first and avoided punishment.

Now that attempts at cooperation have been stopped by UK and US regulators, the airlines will return to their usual state of war. Clashing over who has the flattest bed in business class is likely to prove less expensive than trying to be friends.

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