Sir Richard Branson has rubbed salt in British Airways’ wounds by declaring BA practically worthless, and urging the government to resist any attempts to bail it out.

Branson’s comments will incense BA management, which this week will hold vital talks with cabin crew and ground staff over pay cuts, lay-offs and changes to working conditions aimed at saving £100m a year.

Willie Walsh, chief executive, who is trying to stem big losses and has warned that BA faces a “fight for survival”, wants a deal by June 30.

Branson, who founded Virgin Atlantic, BA’s biggest commercial rival, said ministers should not be tempted to step in. “It would not be in Britain’s interest,” he said.

“We and others are standing by ready to take on their routes and runway slots at Heathrow if they get into serious trouble. I thought the US government’s bail-out of the car companies was a bad idea and it’s the same for BA.”

Virgin had looked at a bid for BA, Branson said, but concluded that the company’s liabilities – in particular its pension deficit – were too great.

“It’s not worth much anymore because of the liabilities. We were thinking about if the shares went under 100p (they closed on Friday at 136½p), but it would be better to wait for its demise,” he said.

Yesterday a BA spokesman said: “This is fantasy. There are no talks with government, and there will be no talks. We have opposed state aid and our position has not changed.”

The fraught relationship between the airlines has worsened. Keith Williams, BA’s finance director, recently questioned Virgin’s claims of a profit, saying its figures went into “Virgin accounting territory”.

It emerged this weekend that Walsh has snubbed a request to give evidence to the House of Commons transport committee on July 1 – the day after the deadline for the union talks. MPs are preparing a report on the future of aviation.

“Given the extremely wide ranging nature of the subject of investigation – which goes far beyond BA – he has reluctantly declined,” an airline spokesman said.

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